COMPENSATION AND BENEFITS WATSON WYATT FLEXIBLE BENEFITS
Asia Pacific - Employees do not appreciate the value of benefits provided for them, say 40% of employers in Asia Pacific.
This indicates a significant gap between the value of benefits provided by employers and employees' perceived value.
The gap in the value of benefits provided and its perceived value may also be why there is often substantial wastage in the benefits component of the total compensation budget, says Andrew Heard, benefits practice director of Watson Wyatt for Asia-Pacific. "Additionally, the growth in benefit costs also remains in the double digits and shows no signs of easing. Companies that are managing costs only by containing salaries could be completely missing the mark here," said Andrew Heard, Asia-Pacific Benefits Practice Director of Watson Wyatt.
After a survey conducted across 12 countries, Watson Wyatt also found that one-third of companies have not been reviewing their benefits strategy in the last 12 months.
The biggest offenders are Thailand and China, with close to 50% of the companies saying that no review of the benefits has taken place in the last 12 months. In contrast, companies in Hong Kong are more vigilant with only a quarter of the companies not having done so.
But with companies opting for cost-cutting measures, the lack of benefits reviews could have grave implications on its organisation's costs, employee engagement and retention of talent.
With benefits comprising of 20 to 40% of the total rewards package, Heard says companies need to review their benefits strategy and ensure that every benefits dollar will contribute effectively to the employee value proposition to ensure appropriate ROI for the organisation.
The survey also found that flexible benefits programmes are also becoming more popular, as 6% of companies are in the process of implementing it and 15% considering adopting the option.
"It is time for companies that are offering a fixed benefits plan to explore alternatives such as a flexible benefits approach as it has a strong advantage in helping employers build a more engaged workforce that will be ready to drive competitive success as the economy recovers," says Heard.
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