Maximizing value: How to design competitive benefits that fit your employees’ needs in Asia Pacific
Focus on enhancement, communication and customization to craft a benefits strategy that delivers a meaningful employee experience.
Salaries are indeed key bases, and it is important to get that right. But once a certain benchmark has been touched, matters such as benefits, learning, trust and the entire experience begin to count.
While there is no denying that competitive salaries are still the main draw, employee benefits are fundamental to attracting and retaining top talent. Especially with a shift in employee expectations in recent years as workers seek support for issues relevant to them and benefits that fulfill their needs.
However, organizations are facing budgetary constraints. Businesses are grappling with how to effectively allocate resources to provide competitive benefits. With inflation in APAC jumping from 3% in 2018 to 5.8% in 2023,1 benefits provision costs have soared throughout the region, with 67% of our 2023 APAC Benefits Snap Poll participants reporting an increase in their benefits spend over the past three years.
67% of companies surveyed have increased their benefits spending in the past three years.
Here are three ideas for crafting the best approach:
1. Differentiate to create a unique employee value proposition (EVP)
One strategy for employers may be to focus on a few niche or crucial benefit items — take Netflix’s unlimited leave policy, for example, or Hewlett Packard Enterprise’s 26 weeks of parental leave. To further differentiate your organization, highlight the unique benefits and culture that make your company an exceptional place to work through targeted employee branding. A well-crafted employer brand can attract candidates, which, in turn, strengthens your EVP.
Another approach is to listen to your employees. It’s crucial to understand their needs and preferences when it comes to benefits so you can personalize your offerings accordingly. Additionally, leveraging benchmarking data, analytics and benefits technology may help you craft offerings that are competitive and cost effective.
The key to standing out lies in customization, proper understanding and effective communication. By focusing on niche or crucial benefit items, actively listening to your employees and developing a compelling employee brand, you can position your company as a magnet for top talent. It’s not just about spending more but spending smarter.
2. Reconsider prevalence: A double-edged sword
Companies seek to be distinctive in their offerings. Yet they often find themselves justifying their budget spend by focusing on what’s common in the market. Is looking at prevalence the best way forward?
Undoubtedly, prevalence is a vital metric for gauging industry best practices and ensuring alignment with market offerings. But an overreliance on it can inadvertently take the focus away from immediate employee needs.
In 2018, flexible working arrangements were not as prevalent but were highly desired by employees. However, the pandemic forced companies to pivot to what is now the norm of remote or hybrid working. While only 2% of job postings on LinkedIn allowed for remote work before the pandemic, this metric had multiplied tenfold by early 2022, exceeding 20%.2
Our 2023 APAC Benefits Snap Poll also reflects that flexible working arrangements now seem to be a given. Eliminating such arrangements could have adverse effects–as highlighted in Oliver Wyman’s A–Gen–Z Report, 85% of respondents prefer hybrid or remote environments. Gen Z is an important demographic and cannot be ignored.
What’s intriguing here is the advantage gained by early adopters of flexible working. Mercer research shows that companies that had already embraced flexible working ahead of the curve were able to provide a more positive and seamless employee experience during the pandemic.3 In contrast, companies that did not provide flexible working had to play catch-up and faced a steeper learning curve. Businesses that embrace change at the early stages have a clear advantage. Forward-thinking companies should seek to differentiate themselves by offering benefits that are aligned with their employees’ evolving needs and wants.
Therefore, while prevalence remains an essential reference point, it shouldn’t be the sole driver shaping benefits provision. To thrive in today’s competitive environment, companies must align their offerings with the rest of the industry while providing employees with the benefits they want. The ability to stay flexible and implement change is key.
3. Provide what matters
We note an increasing interest in “employee rewards and recognition” and “training and development” this year relative to 2018, particularly among those aged 29 and under. This may reflect a change in the values and priorities of this demographic. In the 2022 Oliver Wyman Forum/The News Movement Gen Z Survey, 37% of Gen Z employees who ranked advancement and growth opportunities among the top three reasons they left their jobs or began seeking new opportunities cited a lack of learning and development training or programs.
Further, 27% of respondents indicated they were more likely to seek new jobs to gain better advancement and growth opportunities. In today’s tight labor market, employers must provide the right benefits. Of Gen Z employees, 92% were reportedly satisfied with their jobs or current roles in 2022 — yet 55% planned to leave their jobs shortly to find better employment.4 This reflects the need to create a fulfilling environment with enhanced advancement opportunities. Extending this lens in identifying the key benefit components that matter most to different demographics will help drive value across the board.
Just as flexible working arrangements became a game changer in 2018, these items present an opportunity for employers to be first movers in the talent race. Once a certain salary threshold is met, the entire employee experience begins to count. This has held true in recent years as employees have begun to seek more from their experience than just monetary compensation.
This shift in mindset gives employers the chance to rework their benefits strategies. A targeted approach might be the best way forward for companies to streamline their offerings, manage costs and create a unique employee experience.
2 Mercer. Global Talent Trends Study 2022–2023.
3 Mercer. Global Talent Trends (GTT) Study 2021.
4 Mercer. GTT 2021.
Our data and expertise can provide guidance on how to make the most of what you have while addressing the needs of your workforce. Get in touch to find out how we can help optimize your benefits and support you in crafting a better employee experience for your teams.
Author
Tan Hua Teck, Regional Benefits Lead, APAC
Contributors
Chan Chu Ting, Regional Benefits Consultant, APAC