HMO Versus Competitive Salary
Why are Nigerian professionals turning down job offers that don’t include health insurance benefits?
In the late 1990s through the early 2000s, multinational organizations in Nigeria across industries like oil and gas, FMGC, and banking, began offering their employees health insurance for themselves and their family members.
The motive was simple; these companies were successful and wanted to improve the well-being of their staff while complying with employee welfare standards in the West.
Nigerian corporations that were equally as successful as the multinationals at that time took this as their cue to offer health insurance benefits to their staff.
So it stuck and became the standard.
The Standard Dwindled
In 2010, many medium-sized corporations in Nigeria stopped offering health insurance to their employees. The few ones that did reserve it for managerial staff only.
Tech startups began gaining traction around this period. At first, many of them didn’t offer health insurance to their staff due to cost constraints but as soon as they got funding, it was one of the initiatives they incorporated.
This was one of the major reasons many Nigerian professionals jumped ship to startups.
Money Is No Longer Enough
“I had an appendectomy in 2023 and I paid out of pocket for everything. My salary was N150,000 which was pretty great for an entry-level staff but the company I worked for didn’t have a staff HMO so I was on my own.
Everything was so expensive so I exhausted my little savings within weeks and even had to take a small loan to stay afloat.
‘My cousin visited me while I was recovering and was genuinely shocked when she realized my workplace didn’t offer health insurance. The situation was different at her job as even the office assistants had health insurance.
That night, I updated my CV and applied to a job opening the next morning.”
- Ruth, Product Designer
The exit of major pharmaceutical companies like GlaxoSmithKline (GSK) from Nigeria is one of the catalysts for the skyrocketing cost of healthcare.
This means that even professionals earning healthy six or seven-figure salaries are one health crisis away from debt unless they have HMO coverage.
Employees often come out of that situation with a new motivation to ship their talent to a different company that will give them health insurance benefits alongside a decent salary.
For some, this might even mean an initial pay cut with prospects for upward review but they don’t mind.
“It took 8 weeks for me to land a new job, especially because I was picky about where I applied.
If I visit a company's website and don't see health insurance listed as an employee benefit, I move on. It is now one of my non-negotiables because it just tells me whether a company truly values its employees.
It’s no longer about how good the salary is for me.”
- Ruth, Product Designer
Recruiting managers in Nigeria have pointed to the COVID-19 pandemic in 2020 as when they noticed it became difficult to hire experienced professionals for companies that don’t offer health insurance as an employee benefit.
“I had just completed the third stage of a recruitment process with a strong candidate who I was 90% sure would secure the role.
He called me three days after the interview and asked if the job offered health insurance. I said no and he explained that it was important to him so he wouldn’t continue with the recruitment process.
I was sad but I wasn’t surprised. I have been in similar situations with many applicants in the past four years. I've found it harder to recruit for companies that don’t offer health insurance compared to those that do.
Now, if I’m hiring for a role and I find out there’s no HMO, I ask the applicants upfront if that would be a deal breaker. It really saves everyone’s time.’’
- Melissa, HR Consultant
Health Insurance for Employees: The Law > Perk
In July 2024, the Lagos State government passed a new law that mandates every employer of labor within the state to provide health insurance for their employees.
Businesses that fail to comply with this new law risk being unable to access all state services. Read our post below to learn more about it👇🏾
With this new law, organizations can no longer operate seamlessly without providing HMO for their staff, and it is no longer an exclusive perk for managerial staff.
Protect The Ones Who Keep The Lights On
Acquiring and retaining employees whose skills, insights, and hard work keep a business thriving is important. So is the well-being of those employees.
If they struggle with their health and it trickles down to their finances, it becomes detrimental to their performance at work.
With Casava, employers can offer their staff inexpensive health insurance coverage without worrying too much.
Visit casava.com to learn more about Casava’s health insurance plans, and send all inquiries about staff health insurance by Casava to hello@casava.co or 07025004444 on Whatsapp.