Strained resources, lack of strategic focus and inefficiency remain key HR challenges towards comprehensive benefit management. More than one-third (34%) of Asia Pacific multinationals are in the later stages of developing their global benefit strategies, an increase from 24% two years ago, according to research by leading global professional services company Willis Towers Watson.
Findings from the company’s latest Current and Emerging Global Benefit Themes research also show that over three-quarters (79%) of global or regional reward managers of Asia-headquartered multinationals claim they are under pressure to do more with less and half think that cost pressures will be worse in 2016 than in 2015.
This lack of resources is leading to frustration among managers as almost six in 10 (57%) feel that a need to focus on day-to-day activity is hampering the strategic efforts they could be making, to help drive value from their company’s employee benefit and other reward programmes around the world.
“It’s heartening to see that, despite budgets continuing to be constrained, global and regional reward managers are finding ways to continue the development of their programmes,” said Steven Yu, a senior leader of Willis Towers Watson’s multinational practice in Asia Pacific.
“Asian multinationals that make resource management a priority may be better equipped to balance the realities of day-to-day management with the long-term essential business need to foster employees. By doing this, companies can make the journey to more effective global management of employee benefit and other reward programmes quicker and easier.”
Asia Pacific employers are making steady progress to define and expand focus
Despite the difficulties identified, the research suggests there is optimism around how multinationals are developing their global approach to benefit programmes around the world.
Seven in 10 Asian multinationals claim that involvement of global or regional headquarters in employee benefits is increasing, while 48% believe there is now a meaningful link between the role of employee benefits and the company’s employee value proposition and values.
Yu said: “It’s encouraging to know that almost four in 10 Asian multinationals no longer feel that global governance and oversight of employee benefits is new to them. This is an improvement from the past. Global reward managers should focus on four core areas to help improve value from their employee benefits around the world.”
Firstly, the financial risks associated with defined benefit liabilities are still a major exposure for many Asian multinationals with U.S. and European operations, so identifying, measuring and managing risks — and opportunities — is important to avoid surprises.
Secondly, insurable benefits should be put on a robust foundation by securing economies of scale, while emphasising global consistency in approach and governance. Thirdly, a focus on key activities before and after M&A activity will help to drive value from deals by avoiding inefficient legacies of multiple and disconnected benefit plans. Finally, developing a medium-to-long term road-map for local, regional and global priorities relating to employee benefits helps focus efforts and resources, and drives value.
Other key findings from the research include: