Engaging Your Talent Without Breaking the Bank
With the resurgence of the global economy, companies—especially in Asia-Pacific—are looking not just to hire but to retain their talent. Although companies tend to follow the market on pay, the benefits side of the equation is where they can differentiate their employer brands.
Amid increasing complexity in the workplace, changing employee demographics and ever-evolving labor laws across the region, how do HR leaders win over the hearts of their employees with a differentiated employee value proposition that does not get shot down by the CFO? And just how do HR leaders cope with the added pressure of the “cool Silicon Valley” type benefits being lauded by employees on social media?
Let’s examine the four key drivers of change for employee benefits programs.
Evolving Legislation Across Asia-Pacific: According to Mercer’s recent Mercer BenefitsMonitor 2017 Survey, 42 percent of companies are making changes to their employee benefits programs as a result of changing regulations in their respective markets.
An aging workforce is an issue of growing concern for businesses in Asia. Japan, Hong Kong, South Korea, Singapore and Thailand all have a median age of well over 40 years. Governments across Asia are looking at ways to strengthen their social security provisions, pulling at different levers, such as increasing the retirement age and old-age medical care. Medical benefits provisions have always been difficult to address given the persistent year-on-year increase in medical costs across the region.
Governments in Asia continue to explore greater institutional support for retirement while improving the infrastructure for old-age medical care. Businesses, on the other hand, may not have the capacity to support additional retirement programs, as traditional programs are expensive. Progressive companies are, therefore, looking into new ways to support employees’ financial wellness by offering specific programs aimed at improving employees’ own budgeting and saving skills—from the moment they join the organization.
With advances in workforce analytics, HR leaders can use data to be more precise in their benefits decisions.
As societies shift away from multigenerational households and as women’s participation in the workforce increases, one key area in which regulations have evolved is employer-provided parental leave. For example, India, Japan, the Philippines and Singapore have recently expanded the scope of parental leave coverage to include adoption, while also increasing both maternal and paternal child care leave provisions.
Governments have also been working on improving regulations for nontraditional workforce segments such as contract workers. Legislation has been strengthened on overtime and working hours for the white-collar workforce, and, for the first time in the region, we see recognition of mental health issues and burnout rates.
The ‘Costs’ Effect: Although Asia may be driving much of the growth in the global economy, companies in Asia-Pacific have begun to shift their focus from top-line growth to profitability. And with this shift in strategy, coupled with recent softening of global trade, comes increasing attention on cost. Gone are the days of blanket approvals for hiring the talent needed to support growth at any cost and offering market premiums for key roles. HR leaders are expected to deliver differentiated propositions to attract, retain and engage needed talent with tighter budgets.
This “new normal” for business in Asia-Pacific, coupled with steep increases in medical inflation, has resulted in 32 percent of HR leaders surveyed in the Mercer BenefitsMonitor 2017 Survey citing cost optimization as the key driver for changes to their employee benefits programs. This means employers need to focus on the sustainability of benefits programs and project benefits costs for at least the next five years.
The Rise of the ‘Voice of the Employee’: Thirty-eight percent of survey respondents regard “market competition for talent” as a key driver of benefits program changes.
With 35 percent of Asia’s population currently active on social media and year-on-year growth of more than 27 percent, social media has become pervasive in the lives of employees. As a result, employees, especially millennials, are increasingly vocal about their opinions. Employees are quick to applaud unique or innovative benefits being offered by their employers and even quicker to criticize a lack of benefits offered to peer communities at their own workplaces.
HR leaders now deal with an unprecedented volume of feedback on employer brands that surfaces through the social listening channels being developed by their marketing departments. This voice of the employee, whether current, past or prospective, adds yet another trigger for HR leaders as they tweak their benefits programs and gauge the impact of those changes on the perception of employer brands in the talent marketplace.
Where progressive companies, especially in the technology and financial services industry, may have set the pace with offering unique benefits, other industries have not followed suit. This has led to a lot of angst being expressed online by disenchanted employee groups in the more traditional sectors, such as manufacturing, especially as it relates to parity in medical benefits and leave allowances.
Going Beyond Medical (Benefits): The default option has always been to look at the most sizeable area and increase medical coverage for employees or their dependents. With the rising cost of health care, that may not always be feasible and certainly is not sustainable as a long-term approach.
We recommend standardization of essential medical benefits delinked from roles or salary bands and increased flexibility on the optional benefits. Dependent coverage and co-payment options should be the levers used, based on market conditions, existing legislation and the company’s rewards philosophy.
With advances in workforce analytics, HR leaders can now leverage data to be much more precise in their benefits decisions, using evidence to administer changes to employee segments or even micro-segments that most need or are likely to most appreciate the “cool” benefits.
Find and Communicate the One—Then Communicate Some More
Rather than attempting to do too much and build a laundry list of unique or innovative benefits—or worse, trying to be “market median” for all and standing out nowhere—HR leaders are better served focusing on that one unique benefit that most of their employee segments will appreciate.
Often overlooked, communicating new benefits by leveraging the digital workplace can make a meaningful difference to the success of any new benefits program. Because of the omnipresence of video and mobile in daily lives, communications that are not mobile-enabled and video-led may not get employees excited about the new benefits.
We see a large number of companies using mobile-enabled gamification experiences as a way to drive adoption and engagement around new benefits. Gamification, almost a natural order for the millennial workforce, is becoming increasingly popular among other demographics as well, and it allows for HR leaders to introduce incentives where behavioral change is needed. Finally, appointing “champions” or “ambassadors,” employees who help drive adoption through employee advocacy, can have a considerable impact on the pace of adoption.
No Silver Bullets, No Free Lunches
Despite attention-grabbing headlines that may accompany new employee benefits being offered, organizations should not consider every benefit that is out there—even if they can afford to. Good evidence-based decisions on employee benefits are cast in employee segments and behavioral data, coupled with cost-impact simulations reflecting market and business conditions. Every company has its own unique culture, and any innovation in benefits should not only embody that culture but also enrich it.
A version of this piece first appeared on HQ Asia.