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Managing costs and increasing focus beyond employees’ physical well-being

There is a growing recognition from employers in the Philippines that benefits matter and can be used to drive attraction, retention and engagement of employees, according to a new survey by Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking and solutions company. However, currently, only 48% of employees say their benefits package meet their needs.

The 2017 Willis Towers Watson Asia Pacific Benefit Trends Survey found that employers are aware of the potential power of benefits as 68% of employers across the country feel that their benefits improve attraction and retention, and 67% say they improve employee engagement.

However, there’s a perception gap between employers and employees. While more than two-thirds (78%) of employers said they felt employees highly value their benefits package, a separate survey of employees in the region[1] found that less than half of employees in the Philippines agree.

“This perception gap is troubling, particularly as benefits spend continues to soar,” said Cedric Luah, Head of Health & Benefits, Asia and Australasia at Willis Towers Watson. “Clear opportunities remain for employers to derive greater value from their benefits strategy. This is particularly crucial at a time when employees feel vulnerable due to changes in the workplace, and increasing financial and other strains. Positive action by employers could play an important role in making them feel secure and valued.”

How are employers responding?

Philippine employers’ top priorities for their benefits programs over the next three years are to focus on changing benefit design to manage costs and influence employee behaviour, the survey found.

“This suggests that employers increasingly recognize that, while costs need attention, a simple strategy of cost containment can no longer be effective and that employee behaviour can itself be a cost driver,” said Susan La Chica, Head of Health & Benefits, Philippines at Willis Towers Watson. “This means taking a broader view on how benefits are designed and delivered. It’s no longer about simply offering what’s in line with the market, but understanding the organization, and its particular drivers for engagement and behaviour change.”

Emerging trends in benefit design

The survey found that while traditional benefits continue to be the most prevalent in the Philippines — and viewed as the most important to employees — three years into the future, employers are looking to expand the provision of non-traditional benefits. In particular, Willis Towers Watson sees:

  • Significant attention to behavioural and emotional health management (26% increase from current)
  • Increased focus on financial well-being – Nearly two-thirds of employers are planning or considering providing personal financial well-being programs by 2019. Nearly double from 2017.
  • An expansion of family-friendly programs such as employee discounts (14% increased interest), education allowance (12% increase), and additional maternity leave (11% increase)

Another emerging trend is that, while the majority of employers still focus on external benchmarking to design benefits, 85% of employers are also examining the specific needs of their workforce or at driving behaviour change of employees.

“If employers are serious about using benefits to drive talent goals, it’ll be crucial to first establish an understanding of their particular workforce. What are its unique characteristics? What motivates and engages employees around their health and financial security?” said La Chica. “As such it’s encouraging to see so many employers look inwards when designing their benefits, rather than simply keeping up with an arbitrary market standard.”

Diversity and choice

As more employees look in inward, they discover their needs are diverse across their workforce’s age groups, nationalities, family status, and employee type. This leads many to a benefits package that is not “one-size-fits-all” but can be tailored to the employee via employee choice.

By 2019, the majority (56%) of employers in Asia Pacific plan to offer some form of choice, either through employee choice, flexible benefits, or additional voluntary benefits. The rewards could be high for those who make this move: of those that currently offer flexibility in the Philippines, the majority (85%) said that it demonstrated to employees that the organization recognizes the diverse needs of the workforce, and promotes employee appreciation and understanding of their benefits (85%). In the 2017 Global Benefits Attitudes Survey, more than two thirds (72%) of employees who are offered choice in their benefits report that their benefits package meet their needs.

“One of the key roadblocks that employers face in fulfilling their strategic goals around benefits is a lack of employee engagement or understanding,” said Luah. “A program that can demonstrate to employees that their employer understands them and their needs would go a long way to dispelling some of these obstacles. Any effective strategy comes coupled with robust communication and delivery for the right demographic, for instance, engaging digitally savvy employees through technology.

“Employers are in a unique position to connect employees together using social links. If they can find a way for employees to enjoy the same level of digital experience that they enjoy in their personal lives, this may be a key link to achieving their benefits aims.”

Other findings from the survey include:

  • Health as a differentiator. Philippine employers are ambitious in their plans for their health and well-being strategies: in three years, 79% of employers plan to make their health and well-being strategy a key competitive advantage. In the 2017 Global Benefits Attitudes Survey, 75% of Philippine employees say that managing their health is a top priority in life.
  • Stress is identified as a top issue by employers. However, less than half (44%) of Philippine employers are taking actions to reduce work-related stress.
  • Focus on communication and engagement for retirement plans. Top priorities of Philippine employers for strengthening retirement over the next three years include boosting engagement, improving understanding and appreciation of programs. The majority of employers (87%) also feel that they should take an active role in encouraging their employees to manage their personal finances better.
  • In terms of benefit delivery, there is focus on enhancing traditional communication and personalization, but growing interest in using digital approaches, mobile apps and social links.



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