Posted on Oct 31, 2011 by Sergio Ulloa
A new study released this month by worldwide consultancy firm Mercer has found that leading employers in the Asia Pacific region are continuing to adjust to the challenges present in their rapidly developing markets and have earmarked rising employee healthcare risk and demand for benefits as a particular concern going forward. Regional employers are increasingly recognizing the value of having a healthy, happy and engaged workforce, and are working hard to improve their benefits packages to recruit and retain their prized staff.
Asia Pacific businesses generally experience high levels of employee turnover and absenteeism due to considerable workplace stress and this has fostered growing talent gaps in many important industries across the region. Many of these employers are becoming increasingly aware that maintaining a healthy staff is a key factor to ongoing success and overall competitiveness of their business internationally and that there are considerable costs associated with failing to engage with their employees on these important matters. With a fervent war for talent present in many of these emerging Asia Pacific markets, companies are looking to differentiate themselves with broader employee value propositions, including improved options for health insurance and other family savings plans. However, while many regional firms would like to do more and provide benefits and distinguish themselves from their competitors, rising worldwide healthcare inflation, restricts the capabilities of many employers to offer adequate workplace coverage.
The 'Asia Pacific Total Health and Choice Benefits 2011 Survey Report
' was commissioned by Mercer to identify and examine regional changes in employer risk attitudes. Between 21 February and 22 April 2011, almost 900 businesses participating throughout the Asia Pacific region were surveyed. The study covered 14 major countries across the region, with China, Hong Kong, India, the Philippines and Singapore, being the principal market respondents. Overall, eight industries and organizations of various size were represented in the study. Of those polled, 87 percent were multinational companies, and 44 percent of those had more than 500 local employees. For this year's report, Mercer combined employer health and choice issues of past, present and future, to provide a unique insight into how Asia Pacific businesses will continue adapt to rising employee healthcare demands to compete in a challenging regional and global marketplace.
Mercer's survey results confirm that healthcare continues to be a chief concern amongst Asia Pacific employers, with 81 percent of all companies polled indicating that they were apprehensive about the current and future health and general well-being of their employees. The study found that while a significant majority of employers across the Asia Pacific region do not have an overall integrated strategy for their staff's health and wellness management, over half the respondents realize that is an issue going forward and indicated a desire to update their approach to employee health and implement more sophisticated benefits programs. For these Asian companies, the three primary drivers for promoting better health and wellness within their organizations were to improve office productivity and performance (60 percent respondents), to retain their best workplace talent (52 percent), and to promote protection and good lifestyle habits (40 percent).
This widespread concern about employee health has manifested itself in increased company spending on benefits over the past few years. According to the report, health benefit costs as a percentage of a company's payroll across the Asia Pacific is on the rise. Mercer revealed that 35 percent of employers are now spending more than 6 percent of payroll on their company health benefits package, and a further 10 percent of respondents were allocating over 15 percent towards medical cover. This trend towards an increased benefits outlay is expected to continue as over half the Mercer survey respondents indicated that they were looking to improve their health and wellness benefits package within the next three years. Many of the larger organizations polled noted however that they would expect to share any upcoming increased health benefits expenditure with their employees.
According to the survey data, the most popular health programs currently in effect amongst Asia Pacific businesses are annual employee health checkups (84 percent response), biometric screening tests (59 percent) and health lectures/conventions (49 percent). Going forward, these same firms told Mercer that they play to implement more efficient, interventional and hopefully preventative healthcare programs, including expanding medical risk assessment questionnaires, stress management programs and chronic disease management programs. In addition, Asia Pacific employers are also increasingly recognizing the importance of including a worker's family members within company group insurance policies, both as a valuable recruitment mechanism and highly regarded retention tool. The study showed that 52 percent of the companies polled provide some health benefit to their employees' children, and 40 percent offer cover for spouses as well.
Being able to provide employees with a more diverse array of health benefits opportunities has also become a key area of focus for Asia Pacific businesses. According to the survey data, while 81 percent of employers currently do not offer choice in their company benefits package, 59 percent indicated that they would plan to do so soon, within three years. Employers had long seen variable care plans as an unnecessary business expense, especially considering the high rate of medical inflation present in many of the countries participating in this survey, but are now recognizing the value a choice in benefits programs can have in attracting and retaining the diverse groups of workplace talent needed to succeed in modern international commerce. Across the Asia Pacific region, Mercer saw that 39 percent of employers still provide a more rudimentary one-size-fits-all approach to employee benefits, while another 42 percent vary their benefits program by employee status but still without any real consumer choice. Of the principal markets surveyed, a greater proportion of China's business respondents provide some form employee benefit choice, with 20 percent confirmed, followed by Singapore (19 percent), Hong Kong (17 percent), Taiwan (16 percent), India (15 percent), and the Philippines (12 percent).
Among the minority of companies that had already implemented a broad choice program, Mercer revealed that market competitiveness (21 percent), meeting diverse employee needs (20 percent) and moves toward an incentives strategy (17 percent) were among the key reasons for diversifying their benefits package. The most common choice benefits offered by companies in this category were medical and life insurance coverage. Other benefits like dependent coverage, and lifestyle and wellness incentives were also typically included by firms to cater to the mounting needs of Gen Y employees, who are increasingly risk averse and benefit savvy.
The study furthermore found that the choice program issued by these companies had made a noted difference in meeting various employee needs (43 percent), company branding (35 percent) and total rewards strategy (34 percent) since its implementation.
While these same respondents noted that the complexity in administering customized benefits continues to be a key challenge, the vast majority will be continuing their employee choice program now that it's launched. Of these surveyed firms, 81 percent agreed that their choice benefits programs had met their original objectives and their employees indicating similar support. Of the key industry sectors surveyed, the BPO/Call Centre and financial services industries have been among the quickest adopters of choice health benefits programs in Asia, with 76 percent and 65 percent of respondents expecting to diversify their employee package in the future if they have not done so already.
Mercer was pleased to note that most Asian employers are already providing benefits well above the statutory health requirements required by their respective governments
. The study perhaps shows that regional employers are finally making the important linkage between employee health, company productivity and cost.
Mercer is a New York-based, internationally reknowned human resources consulting firm that provides consulting, outsourcing, and investment services for it's clients around the world.