Over 40% of employers in Asia Pacific think that their employees do not appreciate the value of benefits provided for them, according to a recent survey on benefit trends by Watson Wyatt. The survey, conducted across 12 countries in Asia-Pacific, highlighted a significant gap between the value of benefits provided by the employer and their perceived value by the employees.
This represents a key challenge that employers face in the design, implementation and communication of benefits programmes. “Given the gap in the value of benefits provided and the perceived value by employees, there is substantial wastage in the benefits component of the total compensation budget. Additionally, the growth in benefit costs also remains in double figures and shows no signs of easing,” said Andrew Heard, Asia-Pacific Benefits Practice Director, Watson Wyatt.
The survey also found that over one-third of the companies in Asia-Pacific have not reviewed their benefits strategy in the last 12 months. These findings have grave implications for companies on several levels—cost, employee engagement and attraction and retention of talent. “The HR function faces intense pressure to deliver more value to the company on a tighter budget. Employee benefits have always been an important component of the employment deal. They can make up between 20 to 40% of the total rewards package,” said Heard
Elaine Hwang, Head of Retirement Benefits in Hong Kong explained that Hong Kong results are quite similar to the rest of Asia Pacific. Employers may consider taking several courses of action.
Firstly, employers may consider to conduct a benefit review and benchmark benefits or practices against market to gain a better understanding of cost, utilization, spending patterns, and market practice, which in turn will help identify if further action needs to take place.
Secondly, they may re-examine and negotiate benefit agreements to identify possible reduction in rates or cost control measures. Employers with regional and/or global presence could consider investigating pooling options to achieve better rates and terms.
Thirdly, they may communicate to increase employee’s perceived value. Effective ongoing communication with employees is critical in striving to increase employee engagement and their perceived value of benefits. The research showed that a highly engaged workforce will consistently deliver and has a stronger bond with the company. This, in turn, will also enhance worker retention, productivity and employee morale.
Research showed an increasing interest in adopting employee choice programmes. Of the companies surveyed, 6% were in the process of implementing one and 15% were considering it. A flexible benefit scheme which empowers employees to choose how they want to use their benefit dollar, has the potential to overcome the limitations of a fixed benefit plan. It provides better control of costs, improves employee perception of benefits and thus furthers employees’ total reward satisfaction and engagement.
Paul Arkwright
Publisher
