Many Asian firms think staff undervalue benefits: survey
HONG KONG: Four in 10 employers across Asia are spending more than 20 per cent of their payroll on providing employee benefits, according to a recent survey by Towers Watson, a global professional services company.
However, despite this significant spend, only slightly more than half said that their benefits were valued sufficiently or highly by employees – and 15 per cent said that benefits were not valued at all.
The survey also found that the number of employers planning to either introduce or increase flexibility in their benefit plans is expected to double in the next year: 32 per cent will increase flexibility in their benefits next year (compared with 15 per cent who are doing so this year), and 23 per cent will introduce flexible benefits (compared with 12 per cent this year).
The 2013 Asia Pacific Employee Benefit Trends survey, which was conducted between February and March 2013 among 1,066 employers in the region, also 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.
“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. We found that 81 per cent of employers now have a documented benefit strategy to guide their ongoing benefit decisions, compared with 66 per cent in 2009,” said Matthew Jackson, director for benefits optimisation in Asia Pacific at Towers Watson.
“However, our survey raises troubling questions about the effectiveness and value derived from these strategies – particularly given the investment in them in the current competitive business environment and the war for key talent that we are seeing in the region,” he 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,” Jackson added.
When it comes to benefits communication, the survey found that almost a third (31 per cent) still do not communicate with employees on benefits (although high, this number is an improvement from 55 per cent of respondents in 2009). The survey also found a strong correlation between effective communication and benefit value perception – companies that communicate effectively tend to see higher employee value attached to benefits.
“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,” said Andrew Heard, managing director for Asia Pacific benefits at Towers Watson.
“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.”
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