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Designing flexible benefits to drive the employee experience

Benefits and the employee experience – Part 1

Health and Benefits|Employee Engagement
Modernising Benefits

By Abhishek Singh and Royston Tan | March 7, 2022

Flexibility and choice of benefits can bring value to both employees and employers. Our first article on benefits and the employee experience explores how.

Events of recent years have forced employers to reassess and adjust their benefit plans to meet the changing priorities and conditions of their employees. The new normal deepened the connection people have with technology due to the need to minimise face-to-face interaction, alongside the acceleration of digitalisation and workplace transformation. These changing times call for employers to be bold and innovative when it comes to their benefit programs – to support their diverse (multigenerational and multicultural) workforces in different situations and drive a strong employee experience.

Flexible benefits enable employees to personalise their benefit package using employer-provided options that are most relevant to them. Aside from providing a core level of benefits, employers can provide varied offerings and bring more valuable benefit options to their employees. For example, a young employee caring for elderly parents may opt for a benefit package with additional medical services, while an employee with school-age children may prefer more vacation leave or childcare benefits.

Employees see greater value when offered more flexible choice for their benefits.

Employees see greater value when offered more flexible choice for their benefits (Figure 1).1 Flexible benefits give employees more control, which can help them to feel more positive about their benefits and increase their understanding and usage of the benefit plan. This can be an effective differentiator for branding, talent attraction and retention, and engagement as it assures employees that the organisation cares about their specific circumstances in life.

71% of Asia Pacific employees believe flexible benefit packages meet their needs while 34% believe needs are met without them
Figure 1. Flexible benefits have a higher prevalence of meeting employee needs

Employers can also optimise costs and better budget for benefit offerings by focusing more on benefits that matter to their workforce.

Focus areas for designing flexible benefits

Across Asia Pacific, nearly one-third of organisations are already offering choice and customisation in their benefit offerings. In the next two years, a further 49% plan to introduce flexibility or broaden their benefit packages (Figure 2)2.

30% of Asia Pacific employers are now offering flexibility and 49% plan to enhance their benefit package in the next 2 years
Figure 2. Asia Pacific employers will introduce more flexible benefits in the next two years

For employers planning to offer flexible benefits, there are three areas of focus:

  1. 01

    Relevant benefit choices

    Offering only the most relevant benefits can avoid overwhelming employees and minimise the frustration that can come from too much choice (Figure 3)1. Employers can identify employees’ actual needs and wants by developing effective listening strategies to create an appropriate and robust list of relevant and targeted benefit choices. This will empower employees to make the right choices and make better use of their benefits.

    57% of employees prefer to have a moderate set of meaningful choices while 16% prefer a small number of options
    Figure 3. Employees globally prefer to have a moderate set of meaningful choices
  2. Employers can identify employees’ actual needs and wants by developing effective listening strategies to create an appropriate and robust list of relevant and targeted benefit choices.

  3. 02

    Effective education and communication of their benefit program

    Employees are likelier to appreciate and maximise their benefit plan if they know and understand its components. Organisations can communicate their benefit programs through a myriad of interactive, online and offline channels, from email newsletters to town halls and educational videos. Effective communication strategies are best segmented to the type of workforce, for example manufacturing employees may benefit more from offline communications, while office-based teams may prefer online communication.

    The employer role in benefit education is extremely important — over 50% of employees from various generations select their benefits after reviewing information from their employers (Figure 4)1. According to our 2021 Benefit Trends Survey, a third of employers in Asia Pacific believe their benefit communications enhance employee appreciation of the employment deal.

    To what extent employees review the information provided by employers to make benefit choices - details below

    To what extent employees review the information provided by employers to make benefit choices?

    Over 50% of employees from various generations select their benefits after reviewing information from their employers: Baby boomers at 67%, Generation X at 65%, Generation Y at 64% and Generation Z at 54%.

    Figure 4. The majority of employees anchor their benefit choices through the information provided by their employers

    Younger generations prefer to speak with family, friends, and co-workers (59%) before making their benefit choices. Social connections within the workplace, such as affinity groups or company forums, can improve employee engagement in benefit programs and employee wellbeing.1

  4. 03

    Deliver accessibility through technology and a consumer-grade experience

    Modern technology has interwoven with our everyday lives to make tasks easier, faster, and more accessible — it allows us to pay our bills online, communicate with people remotely, and digitally collaborate with colleagues. Employees have an increasing expectation to manage and access their benefits through a similar digitalised experience. This can improve benefit administration, management and efficiency by automating annual benefit enrolments, providing on-demand access to benefit information, automating claims filing, and other important functionalities.

Starting points for employers considering flexible benefits

Offering a flexible range of benefits does not have to be overwhelming. There are three things that organisations can consider when designing a flexible benefit plan geared to meeting employee needs and employer objectives:

  • Gather insights from your workforce. Understand the current position of your organisation by running pulse surveys and Virtual Focus Groups (VFG) to identify what matters most for your employees. These may include questions on how employees perceive the quality of specific benefits and what benefits employees would like to see in the future.
  • Design a benefit plan backed by data. Work with vendors and partners to help manage and benchmark your data and insights. Carry out a feasibility design and utilisation analysis to design an affordable and trackable program. It is important to note that overcomplicating employee benefits by providing too many choices can lead to ’option paralysis’.
  • Invest in an automated platform for administering and managing benefits. Digitally available and user-friendly tools can offer a breakdown of benefits, ease of access and transparency. Employers can offer more visibility and versatility around employee benefits, such as dependent coverage and add-on options for wellbeing, leisure, health, travel and milestones in life.

Giving employees the ability to choose what matters to them and their loved ones, is one step towards building a better employee experience.

Transforming benefits to offer more choice and flexibility comes with many advantages for employers and employees. Today’s workforce increasingly want employers to take a more active role in protecting their health and wellbeing, and employers have shown they are willing to step up. Giving employees the ability to choose what matters to them and their loved ones, is one step towards building a better employee experience.

Stay tuned for the next article in our series on benefits and the employee experience, where we tackle the impact of burnout.

Sources

1 2019/2020 Global Benefit Attitudes Survey

2 2021 Benefit Trends Survey – Asia Pacific

Authors

Senior Consultant, Benefits Advisory Services, Health & Benefits, Asia and Australasia

Head of Strategic Growth, Health & Benefits, International and Head of Health & Benefits, South Asia

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