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Rising costs and tight budgets are the leading factors influencing employee benefits strategies across the markets.
Nearly half (44%) of organisations in Asia are struggling to understand employee expectations when designing employee benefits, according to the Asia Employee Benefits Report 2025 by the Chartered Institute of Personnel and Development (CIPD) and AIA.
Having surveyed HR practitioners in Singapore, Malaysia, and Hong Kong, and observed proprietary data from over 38,000 AIA corporate clients across the three markets, the report highlighted persistent gaps between what benefits employees want and what benefits packages employers create.
More than one third (39%) of respondents cited a lack of data and benchmarking resources as an issue to making informed decisions, more than double the 15% who said the same last year.
Yet, only one in four (26%) said that gathering employee feedback was important as part of the designing process.
Among the three markets, Malaysia (52%) leads in prioritising employee feedback and surveys, followed by Singapore (45%) and Hong Kong (26%).
Challenges in designing employee benefits
When asked about the key trends and factors impacting organisations’ approach to employee benefits, nearly half (49%) pointed to rising costs – largely driven by medical inflation – while 63% cited budget constraints as the top challenge.
Other influencing trends included:
- technology and digital transformation (34%)
- competition for talent (32%)
- Asia’s ageing workforce (24%)
- sustainability (18%)
- equality, diversity, and inclusion (EDI) (18%)
Employers' offerings vs. employees' demands
Currently, life/accident insurance is the most commonly provided insurance benefit (50%) by organisations, followed by hospitalisation and surgical (H&S) insurance (42%) and outpatient insurance (40%).
However, employee demand is slightly different. Outpatient insurance is the most frequently requested insurance benefit by employees (39%), but H&S insurance is requested by staff in only a quarter of organisations (24%). Similarly, life/accident insurance is being requested by employees in just 27% of companies.
Also, despite mental health insurance (20%) being ranked among the top two priority benefits to be introduced, only 10% of employers said it has been most frequently requested by employees, possibly due to ongoing stigma around mental health in some Asian markets.
Meanwhile, the top three non-insurance benefits offered are:
- health and wellbeing (52%),
- training and career development opportunities (38%), and
- flexible working (34%).
These offerings closely mirror employee preferences. The most commonly requested non-insurance benefits by staff are health and wellbeing benefits (40%) and flexible/remote working (30%). Training and career development opportunities are also sought after (22%).
However, despite flexible/remote working being the second most in demand with employees, fewer organisations are providing this than in 2024 (with a decrease of 8%).
Looking ahead, 33% of organisations in Asia plan to enhance outpatient insurance, followed by mental health (27%) and life/accident insurance (21%).
In terms of other employee benefits, 41% of employers are prioritising enhancements to health and wellbeing benefits, 37% are planning to improve training and career development opportunities, and 29% are looking at more flexible/remote work options (both up from 17% in 2024).
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