Nearly half of employers are spending 20% of their payroll on providing employee benefits, but half of employees have little to no appreciation of these benefits.
The 2013 Asia Pacific Employee Benefit Trends survey, conducted by Towers Watson between February and March 2013 among 1,066 employers in the region, found that employee value perception does not necessarily increase as spend increases. That is, those employers who are spending more on benefits are not necessarily going to see a corresponding increase in value perception.
Matthew Jackson, Director—Benefits Optimisation, Asia Pacific, Towers Watson commented, “It is apparent that benefit strategy now plays a more important role in employers’ eyes when addressing key business objectives such as improving attraction and retention.” 81% of employers now have a documented benefit strategy to guide their on-going benefit decisions, compared to 66% in 2009. However, the survey raises troubling questions about the effectiveness and value derived from this strategy—particularly considering the current competitive business environment and the war for key talent that we are seeing in the region.
Jackson added, “We found that some employers are responding to the gap between actual cost and employee value perception by adding to the number of benefit programmes in their portfolio—but rather than help, this may only widen the gap. As workforces continue to diversify, a ‘one-size-fits-all’ benefits portfolio is rarely the best solution. These employers would likely achieve a similar or better result by reviewing and adjusting their existing portfolio of benefits—and introducing employee choice—rather than adding more programmes for everyone.”
Flexibility increase
The survey also found that the number of employers planning to either introduce or increase flexibility in their benefit plans is set to double in the next year: 32% will increase flexibility in their benefits next year, compared to the 15% doing so this year, and 23% will introduce flexible benefits, compared to 12% this year.
When it comes to benefits communication, the survey revealed that almost a third of organisations still do not communicate with employees about benefits. A strong correlation was found between effective communication and benefit value perception—companies that communicate effectively tend to see higher employee value attached to benefits.
Andrew Heard—Managing Director, Asia Pacific Benefits, Towers Watson commented, “It is crucial that employers recognise the diversity in their workforce and that different segments of employees have different needs. Flexible benefits are a great way to do this, as it enables employees to pick and choose those benefits that appeal to them—however this is only part of the picture. Without a strong communication and administration strategy, much of this effort would be wasted. Employers should take a holistic look at their benefit design and overall portfolio to optimise their benefit spend and increase employee value perception.”
Organisations’ spend on benefits in the last fiscal year
| Less than 20% of payroll | 20% < 40% of payroll | More than 40% of payroll | Don’t know | |
| Region | 39% | 37% | 3% | 21% |
| China | 38% | 33% | 7% | 22% |
| Hong Kong | 39% | 46% | 1% | 14% |
| Indonesia | 29% | 43% | 7% | 21% |
| Malaysia | 34% | 45% | 4% | 17% |
| Philippines | 34% | 44% | 3% | 19% |
| Singapore | 42% | 33% | 3% | 22% |
| Taiwan | 40% | 34% | 1% | 25% |
| Thailand | 35% | 33% | 4% | 28% |
Paul Arkwright
Publisher
