Optimising benefit costs in the new normal

Employers are grappling with many competing challenges in the post-pandemic new normal — from work transformation to the growing and urgent focus on employee wellbeing and resilience. The underlying question to all of these changes is — how are benefits financed, and what is the impact on cost?

Asia Pacific employers have faced escalating costs consistently for many years. In 2021, while cost pressures eased slightly, this was temporary relief before the trend springs back up. This presents a small window of opportunity to reflect on how to manage costs while providing benefits that are still relevant and aligned with evolving employee preferences.

The challenge for employers is clear: How can they offer the best, most relevant benefits while ensuring cost sustainability and quality?

This may seem a daunting question amidst the current business uncertainty, but employers can take a few steps almost immediately to set themselves up for cost sustainability, while ensuring benefits continue to meet employee needs, as well as the organisation’s philosophy and values.

Key priorities for the immediate term

A broader definition of returns

Once organisations achieve a deeper understanding of their current state and a blueprint for future benefits from a design perspective, they can then move towards building a sustainable plan. It will be key to define a set of core benefits (e.g., level of health care coverage, life cover, retirement contributions, time off) that provide a minimum level of security/protection.

And building on this core set, employers can:

• Repurpose benefits that may be unneeded or underutilised
• Broaden out benefits with the understanding that employee needs have changed

To read more about managing the cost of benefits, including emerging approaches to measuring outcomes and actions to support cost sustainability, please complete the form on the right to access the full version of this article.