Investment in benefits still a major priority for attracting and retaining talent
SINGAPORE, June 14, 2023 – Close to three in four employers in Singapore see the competition for talent as the number one business issue influencing their strategy for employee benefits in 2023. But rising inflation and weakening business environment are putting them under pressure to balance rising costs and evolve benefits strategies. That is according to a new study by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company.
The 2023 Benefits Trends Survey found that concerns around competition for talent (73%) and rising cost (55%) are the top two most important factors influencing organisations’ benefits strategies. Although the focus on inclusion and diversity has dropped slightly from 2021 due to the rising pressure on business issues, it is still nevertheless high on the list on third place, followed by flexible work arrangements.
The ambition to improve benefits compete with the increasing pressure to manage costs and optimise the value of benefits programmes. More than half of employers (59%) cited that persistent high inflation would have a significant impact on their benefits budgets in the next two years, while 52% also attributed weakening economy and business environment as key factors.
“The current state of the economy and the labour market are putting Singapore employers in a precarious position, as they balance winning the competition for talent and contending with the rising cost of services, while budgets remain tight. Additionally, the post-pandemic needs of employees are changing and demands for comprehensive benefit provisions continue to grow. To truly resonate with employees and gain a competitive advantage, companies must keep their ears close to the ground and get creative and flexible in rethinking their benefits strategies,” said Audrey Tan, Head of Health & Benefits, Singapore, WTW.
Beyond competing ambitions, employers are also challenged by misalignments between what they offer and what employees are looking for in their benefits programmes. In Singapore, employers see health benefits (74%), mental health support (42%) and risk and insurance benefits (39%) as the most important benefits in their portfolios.
A separate survey of employees, however, found that employees are placing greater emphasis on short- and long-term financial security, support with decisions on their benefits and whether the programmes offered can support flexible working and their families’ needs. The most important benefits they identified are flexible work arrangements (43%; vs 35% by employers), retirement plan / long-term finances (37%; vs 3% by employers) and support for employees’ benefits decisions (32%; vs 5% by employers) in addition to health benefits.
“The same benefits will not resonate for everyone. Employers need to cater to different needs, whether it’s differences by gender, ethnicity, or other factors, ensuring that employees have a choice,” added Audrey.
The results of the Singapore 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 areas include:
“Our survey shows that employers recognise the urgency in delivering more efficient benefits programmes. The opportunities to bridge current gaps are plenty and we expect companies to take more aggressive actions over the next two years in elevating their current benefits strategies.
“The challenge 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,” said Cedric Luah, Managing Director and Head of Health & Benefits, International, WTW.
The 2023 Global Benefits Trends Survey examines the future direction of an organisation’s benefits strategy, how innovative solutions are used for old and new challenges, and how employers are changing and adapting their benefits design, financing, administration and analytics.
The survey was conducted between March and April this year 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 Singapore, 111 employers took part in the survey, representing 0.2 million employees.
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.
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