Employee Benefits: Can Creative Benefits Make Up For Lack Of Cash?

September 3, 20155:54 pm1339 views
Employee Benefits: Can Creative Benefits Make Up For Lack Of Cash?
Employee Benefits: Can Creative Benefits Make Up For Lack Of Cash?

With budgets under scrutiny, companies are unlikely to increase salaries.  However, according to the Mercer survey, they are likely to be looking at creative approaches to benefits and allowances to make up for the remuneration shortfall.

Mercer’s recent annual Total Remuneration Survey confirmed that although salary levels across Asia have increased, they remain 10% lower than pre-financial crisis levels and in many emerging economies, once inflation has been taken into account, real wage growth is low.

In fact, 60% of the companies, eight out of 12 countries in Asia Pacific surveyed through the Mercer Benefits survey said they were looking at reviewing their benefits – allowances, health insurance and personal and accident insurance being the top three on their list. In terms of benefits, there are four key trends:

  • Health and wellness benefits: Implementation of robust health and wellness programs to reduce absenteeism, increase productivity and reduce premium rates
  • Adapting to a multi-generational workforce: Re-designing benefits programs to better meet employees’ life stage needs and optimize their benefits spend
  • Attention on existing benefit spends to optimize costs: To counter the huge increase in health costs due to high medical inflation and the impact on premiums
  • More innovative and flexible packages: Broader definition beyond traditional benefits such as life, medical and retirement schemes, with flexibility and choice becoming more commonplace

“Against the backdrop of squeezed salary increases we are likely to see companies adopt increasingly more innovative and segmented approaches to employee benefits as they seek to create distinctive value propositions that will help to attract and retain employees,” said  Puneet Swani, Partner, Information Solutions & Rewards Practice Leader – Asia, Middle East and Africa at Mercer.

Swani added: “Hiring throughout Asia will continue to be competitive across many sectors and businesses will need to offer compelling benefits packages if they are going to retain current employees and attract new ones. Organizations may even decide to reward peers differently, placing greater emphasis on incentivizing and rewarding the future value creators, rather than past legacy drivers.”

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