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Hong Kong employers are prioritising the provision of health benefits (82%), while employees are keen on retirement plans / long-term financial incentives and flexible work arrangements (both 38%).
To stand out from the competition, an increasing number of employers in Hong Kong are targeting an ‘above market’ benefits position to attract top talent despite rising costs, found the 2023 Benefits Trends survey by WTW.
According to the study, more than three-quarters (77%) of employers in Hong Kong see competition for talent as the number one business issue influencing their strategy in employee benefits in 2023, followed by rising costs (64%) and the cultural shift towards flexible work (28%).
When considering benefits strategies, employers cite managing plan cost as the key area of focus (74%), followed by industry benchmarking to understand their benefits competitiveness (47%) and improving employee wellbeing (45%).
In the race to expand benefits, Hong Kong employers are prioritising the provision of health benefits (82%), risk and insurance benefits (43%) and career, training and development (43%). However, a separate survey of employees found that there may be a misalignment between employers' and employees' expectations. The survey showed that employees prioritise retirement plans / long-term financial incentives and flexible work arrangements (both at 38%), followed by health benefits and the support for their benefits decisions (both at 33%).
"The post-pandemic needs of employees are changing and demands for comprehensive benefit provisions continue to grow," said Eric Lam, Head of Health & Benefits, Hong Kong and Macau, WTW. "To remain competitive in a talent-driven service economy, employers must keep their benefits packages in line with peers – to the benefit of employees.”
The results of the Hong Kong survey mirror the views of employers from the wider Asia Pacific (APAC) region. Respondents identified a need to improve all areas of their benefits strategies over the next two years to elevate employee health and wellbeing.
Some of the key findings in APAC:
- Close to one-third (31%) of APAC employers said they are looking to improve the positions of their benefits in financial wellbeing / short-term finances, followed by mental health support (28%) and retirement plans / long-term finances (27%).
- Employers are also putting greater emphasis on diversity, equity and inclusion (DEI), with more than half (57%) planning or considering conducting a review of their inclusion and diversity benefits.
- Employers are taking more aggressive actions to manage the budgets of their benefits programmes, with 71% of APAC employers planning to improve contract terms with their vendors, while over half (56%) are looking to secure additional funding for their benefits programmes. Two in four (44%) plan to expand the use of risk financing arrangements and 37% plan to increase the employee share of cost.
- Close to half (48%) of APAC employers are also planning or considering more tools and services to help employees choose the best options when using their benefits.
Cedric Luah, Managing Director and Head of Health & Benefits, International, WTW, said the challenge for employers now will be to develop a truly equitable approach that not only tailors to the individual needs of the workforce, but also ensures that the value of their investments is optimised to become most cost-effective. "Companies that can achieve this balance will differentiate themselves and gain a strong advantage against their competitors.”
The 2023 Global Benefits Trends Survey was conducted between March 1 and April 14, 2023, with responses from a total of 5,233 employers across 95 markets globally, representing 22.9 million employees. Amongst which, 1,746 employers are based in Asia Pacific, representing 4.9 million employees. In Hong Kong, 134 employers took part in the survey, representing 0.1 million employees.
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