As agility becomes an increasingly important business imperative, a growing number of organisations are recognising that business agility needs to start with the employee. Companies are offering their workers ever more flexible working hours and environments, but how can HR apply that same flexibility to benefits? The key lies in giving employees more than just a choice of benefits; they should have a stake in the decision making process too. HR Magazine sat down with Rita Au Yeung, Manager, People & Culture Regional Headquarters, Philip Morris Asia Ltd. (PMAL) to find out how to make employee choice the centre of any benefits programme and balance flexibility with cost.
Flexibility
Core to the new flexible people design philosophy is the employee. Au Yeung summarised, “We put employees at the core of what we do. With our new way of working and Philip Morris’ transformation, we felt that this was something we needed to open up to.” This beautifully manifested itself in a new flexible benefits system that provides coverage in three areas: life insurance, health insurance and wellbeing. While PMAL mandates a minimum level of life and health insurance, employees are otherwise able to allocate benefits depending on their particular needs. Au Yeung elaborated, “We give each of our employees some credits to spend as they want. We’ve found that employees at different stages of their lives may have different preferences and we want our staff to be able to act accordingly.”
Staff who feel no need for broader coverage in their life or health insurance are able to use any leftover credits on a range of wellness benefits, such as health checkups, vaccinations and optical care. This provides employees with an extra layer of flexibility, which in turn drives engagement and satisfaction. It’s important to note that although flexibility is at the core of PMAL’s new system, a good amount of structure remains and for good reason. To avoid choice overload, especially in the first year of a flexible benefits system, PMAL has opted to hold off on providing a full suite of benefits—such as travel, home or gadget insurance—at least for the time being. Au Yeung explained, “We wanted to make it easier for employees to understand the new system and make choices that were right for them. As a next step we plan to gather a wide variety of data and evolve our flexible benefits plan accordingly.”
Inclusion
Evolution, guided by employees, is one of the keys to Philip Morris’ global transformation. To get a good sense of what employees needed, PMAL held a ‘hackathon’, inviting employees from all over the company, at different stages of their careers and lives, to share how they would improve the employee experience. Au Yeung noted, “We do not want to presume that HR knows everything—often they do not! We wanted to provide a platform for employees to give us feedback. If you get feedback from employees and act on it, you encourage them to buy in.”
The People & Culture team at PMAL began by collaborating with Agorize, an online crowdsourcing company, who sourced a variety of ideas from teams of university students via an innovation challenge to generate new ideas about leave policy. The short listed ideas were then presented directly to the employees, who were asked to vote on which ones they wanted the most. As a result, birthday leave, family leave and community service leave were added to employees’ leave portfolios. In addition, PMAL also upgraded their maternity leave to 18 weeks and paternity leave to 10 working days.
When providing more inclusive HR processes, it’s important that HR doesn’t confuse flexibility with letting employees have whatever they want. Au Yeung commented, “HR’s job is to check and balance what the employees want with what the business needs. Take flexible benefits for example; if we went along with whatever employees wanted we could have ended up with a situation where both business and the employees lost out—like if something happened to an employee without insurance.” HR should be striving to provide a framework that empowers employees in decision making and helps them avoid making short-sighted decisions.
Cost
The last vital consideration is of course cost. Contrary to common belief—and to the relief of CFOs everywhere—flexible benefits do not have to come at that great a cost. First, by providing a structured and / or simple flexible programme, the cost of premiums can be kept down. Secondly, the true cost of switching to a flexible benefit programme should also be measured against the increased cost of sticking with a traditionally structured one. Au Yeung shared, “Interestingly, the flexible benefits programme we finalised only came with an increased cost of around 9 or 10%, and this was only slightly higher than the usual inflationary increase we have had in our old, rigid system.” HR should ask themselves if more value can be had by spending a little more on a flexible system, rather than sticking to one which provides little choice. PMAL has also worked to reduce costs by promoting healthy living across the company—therefore keeping the costs of employees using healthcare benefits and the associated premiums to a minimum.
Initiatives related to healthy living range from offering fresh fruit, healthy snacks and long-boiled Chinese soups to providing employees with subsidised gym memberships. PMAL has also partnered with a local NGO which designs programmes that aim to improve the health of people all over Hong Kong. These usually come in the form of lunchtime talks, which take place in communal staff areas. Fresh fruit and healthy snacks are provided to literally sweeten the deal and attract attendees. Au Yeung reflected, “There are a few ways to ensure that people come to these healthy-living talks. Firstly, we let employees choose the topics so that they are as relevant as possible. Secondly, the talks take place during office hours and in an accessible location. Lastly we provide things like fruit, breakfast or refreshments. We’ve found that the talks do not cost a lot of money but generate a lot of interest and communication between employees.”
Paul Arkwright
Publisher
