2015 Asia Pacific Benefit Trends

Innovate to Drive Value from Benefits

2015 Asia Pacific Benefit Trends

Innovate to Drive Value from Benefits

Table of Contents
Executive Summary

About the Survey

Section One: Benefits Overview

Section Two: Benefit Programs

14

Section Three: Employee Value Perception

19

Section Four: Communication and Administration

23

Conclusion

25

2015 Asia Pacific Benefit Trends 3

 Executive Summary

Across Asia Pacific, employers are continuing to

focus on maximising the value derived from the
benefits they offer to employees.
Employers face a two-sided challenge. On one
hand, benefits are increasingly seen as an
integral part of the Employee Value Proposition
a reward lever that can help attract, retain and
engage employees. On the other hand, benefit
costs which already represent a significant
percentage of payroll continue to rise.
In this context, a one size fits all benefit
strategy is unlikely to be successful. In order to
be effective, a benefit strategy must be aligned
to business objectives, be flexible enough to suit
diverse employee needs, and be administered
and communicated in a way that employees
find simple and engaging. This is not an easy
proposition, but our survey finds that Asia Pacific
employers are taking steps in the right direction,
designing innovative and flexible benefits, and
using them to help drive business strategy.

Employers

face a two-sided challenge.

On one hand, benefits are increasingly
seen as an integral part of the Employee
Value Proposition. On the other hand,
benefit costs continue to rise.

Key Findings
As in previous years, attraction and retention
of key talent is a major focus for organisations
benefit strategies, with 66% of employers
saying that it is a key objective (Figure 2,
page 8).
Benefit costs continue to rise and were
cited by over three-quarters of respondents
as a major challenge (Figure 3, page 9).
This is unsurprising when just over four in
10 employers spend over 20% of payroll on
benefits (Figure 4, page 10).
Despite the significant spend on benefits, only
16% say that employees value their benefits
highly, which is consistent with 2013. While
there is some increase in those companies
who say benefits are highly valued at the
higher levels of benefits spend, the increase is
not proportionate. (Figure 10, page 19).
Employers that communicate benefits
effectively and take employee insights into
account when determining which benefits
to offer see higher value in their benefits
programs. (Figure 10c and 10d, page 20).
Those that implemented flexible benefits
said that it had been successful in promoting
employee understanding/appreciation of
benefits (67%) and improving attraction and
retention (59%). (Figure 9, page 17).

2015 Asia Pacific Benefit Trends 5

About the Survey

The 2015 Asia Pacific Benefit Trends survey is the fourth in our survey
series. The survey tracks trends in Asia Pacific-based employers benefit
plans and strategies, with a particular focus on cost and value perception.
It continues to be one of the most comprehensive surveys of its kind,
reflecting responses from 1,145 employers across 20 countries.

Size of employee population*

13

10

49

49%
12%
9%
9%
10%
13%

Less than 1,000

1,000 to 2,499
2,500 to 4,999
5,000 to 9,999
10,000 to 19,999
20,000 or more

* Numbers may not total 100% due to rounding

12

Country
1

10

16

9
5
5

5
11

5
10

10%
9%
9%
5%
5%
5%
10%
11%
5%
16%
7%
7%
1%

China
Hong Kong
India
Indonesia
Japan
Malaysia
Philippines
Singapore
South Korea
Taiwan
Thailand
Vietnam
Other

 Section One:
Benefits overview
Across the region, employers understand the
importance of not only having a benefit strategy, but
ensuring that it is consistent and sustainable in the
long run. The vast majority of survey participants
have a long-term, documented benefit strategy, with
most saying that it is determined at the country
level (Figure 1). This is appropriate for a region
such as Asia Pacific, which has varying needs and
preferences across its highly diverse countries.
However, almost one in three companies (28%)
still say that they do not have a long-term strategy.
Those companies risk not leveraging the value of the
benefit programs that they provide to employees.

Figure 1. Does your organisation have a long-term

documented benefit strategy? If yes, how is it determined?*
5

12

16

28

7
2
32

12%
16%
7%
32%
2%
28%
5%

Yes at the
Yes at the
Yes at the
Yes at the
Yes other
No
Dont know

global level
global level with local input
regional level
country level

* Numbers may not total 100% due to rounding

Figure 1b. Does your organisation have a long-term documented

benefit strategy? (Those answering no by country)
More than four in 10 employers in China (43%)
and Japan (44%) say they do not have a longterm benefit strategy. In contrast, only 10% in
Taiwan do not have one.

Country

Percentage answering No

Region

28%

China

43%

Hong Kong

34%

India

24%

Indonesia

21%

Japan

44%

Malaysia

27%

Philippines

34%

Singapore

33%

South Korea

27%

Taiwan

10%

Thailand

25%

Vietnam

22%
2015 Asia Pacific Benefit Trends 7

Figure 2. What are the top objectives your organisations

benefit strategy seeks to address over the next three years?
0%

20%

40%

60%

80%

Improving attraction and retention

66
68
Improving employees perceived value of benefits
42
46
Improving employee engagement
41
41
Controlling employment costs
32
41
Improving employee performance
27
30
Improving employee wellbeing
26
N/A

Containing health related benefit costs

16
N/A

Harmonising/rationalising benefits following change event

15
14
Alignment with global benefit strategy
15
14
Reducing absence
2%
2%

Other
1%
1%

2015

2013

Just over a quarter (26%) of employers said that improving

employee wellbeing was an objective, but only 16% cited
containing health related costs. This is an encouraging
sign that employers may be thinking about wellbeing more
holistically, going beyond basic cost management.

8 towerswatson.com

Objectives and challenges

For those that do have a benefit strategy, the focus
continues to be on maximising value. Most respondents
(66%, compared to 68% in 2013) said that one of their
top objectives was improving the attraction and retention
of key talent (Figure 2). Towers Watsons 2014 Global
Benefit Attitudes survey supports this objective, as it
found that employees view benefits such as retirement
and health as an important reason to work for or stay
with their current employer.

Towers

Watsons 2014 Global Benefit

Attitudes survey found that employees
view benefits such as retirement and
health as an important reason to work for
or stay with their current employer.
The second most cited objective was improving
employees perceived value of benefits (42%, compared
to 46% in 2013).
Fewer cited controlling costs as a focus of their benefits
strategy 32% compared with 41% in 2013 perhaps
signalling a return to a focus on growth.

While controlling cost has dropped in the list of

benefit strategy objectives, it still continues to
challenge employers (Figure 3). For the vast majority
(76%), rising benefit costs are a top challenge over
the next three years.
A third cited poor understanding of benefits as a
challenge. This number has dipped slightly since
2013, from 38% to 33% this year. There was also
a drop in those citing poor communication as
a challenge from 17% to 9%. This suggests
employers may have focused more effort on
communication, which is essential for promoting
employee appreciation of their benefits.
More employers cited the impact of regulatory
changes and changes to statutory benefits as
a challenge 28% cited this option this year,
compared to only 17% in 2013.

Figure 3. What are the top challenges for your benefit

strategy over the next three years?
20%

0%

40%

60%

80%

Rising benefit costs

76
72
Poor employee understanding of benefits
33
38
Impact of regulatory changes/changes to statutory benefits
28
17
Implementing a consistent benefit strategy across countries
26
N/A

Organisational change (e.g., M&A, outsourcing)

24
22
Changes to workforce as a result of economic uncertainty
22
21
Lack of data
12
14
Lack of a global strategy
10
10
Poor communication
9
17
Lack of leadership/oversight
7
8
Other
3
2

2015

2013

In Indonesia, 57% of employers cited the impact of

regulatory changes/changes to statutory benefits as
a challenge, reflecting recent changes to statutory
healthcare provision, and additional statutory retirement
provision expected this year.

2015 Asia Pacific Benefit Trends 9

Costs

Figure 4. How much did your organisation spend on benefits

in the last fiscal year?

Its no surprise that cost leads the list of challenges

when we look at the numbers, we find that
benefits provision constitutes a significant spend
for many. As Figure 4 shows, over four in 10 (41%)
of employers spend more than 20% of payroll on
benefits.

22
37

Looking across countries (Figure 4b), there is quite

a lot of variability across the region. Costs are
particularly high in Philippines and Indonesia, where
38% and 29% of employers respectively spend
upwards of 30% of payroll on benefits.

5
9

In the Philippines, high benefit costs are driven

by a significant spend on medical benefits (which
often extend to parents of employees) as well
as retirement benefits (the Philippines still sees
relatively high prevalence of defined benefit plans).

27

37%
27%

Less than 20% of payroll

20% to < 30% of payroll

9%

30% to < 40% of payroll

5%
22%

40% or more of payroll

Dont know

Retirement benefits are a major contributor in

Indonesia as well, given the multiple layers of
provision (including statutory, severance-based and
discretionary). In 2014, Towers Watsons Global
Medical Trends survey found that Indonesia also
had one of the highest medical trends in the region,
expected at 13.5%.

Regionally, over one fifth (22%) of employers do not know how

much theyre spending on benefits, a nudge up from 2013
when 18% said the same. This suggests that companies are
struggling with benefits governance, juggling multiple systems,
vendors and administrative platforms.

The converse is true of Vietnam, where almost three

in five (58%) of employers spend less than 20%
of payroll on benefits. Here, benefits have tended
to focus more on statutory provision. However,
discretionary provision particularly around medical
and risk cover has seen growing prevalence in
recent years.

Figure 4b. How much did your organisation spend on benefits in the last fiscal year? (By country)
Country

Less than 20% of payroll

20% to < 30% of payroll

30% to < 40% of payroll

Region

37%

27%

9%

5%

22%

China

40%

28%

8%

7%

18%

Hong Kong

47%

19%

6%

2%

27%

India

52%

21%

7%

2%

17%

Indonesia

19%

35%

18%

11%

16%

Japan

24%

31%

11%

2%

32%

Malaysia

21%

40%

8%

4%

27%

Philippines

21%

24%

20%

18%

18%

Singapore

37%

31%

8%

2%

22%

South Korea

44%

33%

4%

0%

19%

Taiwan

40%

26%

7%

1%

26%

Thailand

29%

33%

7%

9%

21%

Vietnam

58%

17%

3%

4%

18%

10 towerswatson.com

40% or more of payroll

Don't know

In India, the relatively low benefit cost is a reflection

that some benefits that are seen as traditional
in other countries, in India are viewed as part of
payroll, or cost to company (CTC) for example,
medical outpatient allowances or Provident Fund
contributions.

Over

four in 10 (41%) of
employers spend more than
20% of payroll on benefits.
One third of companies said that benefits costs are
on the rise (Figure 5). In line with this view, Towers
Watsons 2014 Global Medical Trends Survey, based
on responses from leading global medical insurers,
found that the cost of employee health care benefits
in Asia Pacific was projected to increase by 9.3%
regionally in 2014, higher than the 8.8% and 8.4%
increases experienced in the two years prior.

Figure 5. Net of inflation, how does this change in cost

compare with the previous 12 months?
5
20

42

33

5%
42%

Decreased
Stayed the same

33%
20%

Increased
Dont know

2015 Asia Pacific Benefit Trends 11

Figure 6. Which actions have you taken/are you planning with

regard to your benefit programs over the following timeframes?
0%

20%

40%

60%

Review and update benefit plan designs and strategies

66
64
Increase employee communication
48
61
Implement new business systems
31
37
Increase number of benefit programs
27
37
Make employees more accountable
21
35
Improve transparency of costs
18
25
Increase flexibility in benefits
11
32

80%

Actions Planned
When it comes to actions taken around benefits, two
in three (66%) have reviewed and updated plans in
the last 12 months, and another two in three (64%)
plan to again in the next 12 suggesting that for
many, this is an annual activity (Figure 6).
This year, 35% noted that they planned to make
their employees more accountable a jump from
24% in 2013. One in five also said that they plan
to introduce a cost sharing strategy. Both these
statistics suggest that employers are gradually
moving away from a culture of benefits entitlement,
and towards encouraging employees to take
ownership and control of their benefits.
As in our previous survey, it is surprising to note
that 37% plan to increase the number of benefit
programs that they offer (33% said this in 2013).
The employers that are planning instead to introduce
(26%) or increase (32%) flexibility in their benefits
may be taking a more cost-effective approach to
ensuring that employee benefit needs are met.

Introduce flexible benefits

11
26
Introduce strategy for cost sharing
8
20
Introduce global insurance pooling
8
14
Decrease number of benefit programs
6
7

The proportion of companies planning to

introduce or increase flexibility in their
benefits next year is two to three times
greater than the number that have done so in
the last year.

Other
1
2

In the last 12 months

In the next 12 months

Although reviewing and updating benefit plan design

and strategy was the top action planned regionally for
the next 12 months, in some counties including
China, South Korea, Malaysia, Philippines, Thailand
and Vietnam increasing employee communication of
benefits was top.

12 towerswatson.com

Employers

may be gradually
moving away from a culture of
benefits entitlement, and towards
encouraging employees to take
ownership and control of
their benefits.

 Towers Watson View

Employers across the region understand the value that an effective benefit strategy can bring, and are finding ways to draw out
this value. Their objectives are focused more on utilising their benefits to support overarching talent strategies on attraction,
retention and engagement rather than cost containment.
However, significant benefit costs constrain these objectives, and many employers may be keen to act but unable to do so. In
such an environment, it has never been more important to prioritise and ensure that the actions undertaken will truly address
the challenges faced.
The way many employers are approaching this dilemma is by encouraging employees to be stakeholders in their own benefits,
whether this is through cost sharing, or introducing flexibility whereby employees can have a greater say in the benefits they
have. For employers, greater employee participation can be an important step towards achieving one of their most important
strategic benefit objectives: to improve attraction, retention and engagement, and to increase the perceived value that
employees have of their benefits.

2015 Asia Pacific Benefit Trends 13

 Section Two:
Benefit Programmes

When it comes to benefit programs offered (Figure

7a), traditional benefits such as annual leave,
medical inpatient and screening remain the most
prevalent.
While lifestyle benefits such as a gym allowance
have seen increased interest in recent years,
they are continue to be less prevalent, with only
27% companies currently offering them. However,
15% of employers are looking to offer such benefits
in the future.

Giving employees the ability to buy and sell annual leave can be
a simple but highly valued way of introducing flexibility in
benefits. However, only 11% of employers currently offer this
benefit and 9% plan to in the future.

Figure 7a. Does your organisation offer or plan to offer any of the following benefits?
Currently offer

Plan to offer in the

next 12 months

Plan to offer
beyond 12 months

No plans to offer

Annual leave

97%

1%

2%

Medical inpatient

89%

1%

1%

9%

Medical screening

81%

4%

2%

13%

Life and AD&D insurance

80%

3%

3%

14%

Medical outpatient

79%

2%

2%

17%

Critical illness and/or disability insurance

72%

2%

4%

22%

Retirement benefits

58%

3%

5%

34%

Dental

55%

2%

4%

39%

Education allowance

36%

4%

6%

54%

Optical

32%

3%

5%

60%

Housing allowance

30%

2%

3%

65%

Lifestyle (e.g., gym membership)

27%

6%

9%

58%

Child care benefits

22%

4%

7%

67%

Ability to buy/sell annual leave

11%

4%

5%

80%

Financial planning

9%

6%

6%

79%

Retiree medical

9%

2%

3%

86%

Elder care benefits

4%

2%

5%

89%

*Less than 0.5 per cent

14 towerswatson.com

Health management programs are less prevalent

across the board (Figure 7b). Rolling out relevant
health management programs may be an effective
way to get employees more engaged and involved
in their benefits. As Towers Watsons 2013/2014
Staying@Work survey found, employers believe
that stress is the number one lifestyle risk faced
by employees in the region. However, only 30% of
employers offer an Employee Assistance Program,
designed to help employees through difficult times,
and even fewer 19% currently offer stress
management programs. However, over one in
10 employers plan to offer stress management
programs (14%) or lifestyle behaviour coaching
(13%) in the next 12 months, indicating that
more employers are seeing the need to support
employees in this area.
Despite the fact that chronic diseases are a
significant and growing health concern in the region,
chronic condition management programs have not
gained traction for Asia Pacific employers, with only
9% currently offering them.

Figure 7b. Does your organisation offer or plan to offer any of the following health management programs?
Currently offer

Plan to offer in the

next 12 months

Plan to offer
beyond 12 months

No plans to offer

Biometric screening (e.g., blood pressure, BMI)

56%

6%

5%

33%

Occupational health and safety

49%

9%

6%

36%

Health risk assessment/appraisal

40%

10%

6%

44%

Employee Assistance Program (EAP)

30%

9%

9%

52%

Get active/walking programs

23%

13%

9%

55%

Diet and nutrition counselling

21%

12%

9%

58%

Stress management (resilience)

19%

14%

11%

56%

Weight management

16%

11%

9%

64%

Web-based health information tools

16%

9%

10%

65%

Lifestyle behaviour coaching

15%

13%

10%

62%

Health decision support (telephonic)

15%

6%

9%

70%

Smoking cessation program

11%

9%

8%

72%

Chronic condition management

9%

8%

9%

74%

2015 Asia Pacific Benefit Trends 15

 The Benefits of Health

The Towers Watson 2013/2014 Staying@Work survey showed that stress is the number one lifestyle risk for employees,
according to their employers. Our global research shows that there is often a disconnect between employers and employees
about the drivers of this stress (see chart below).
Our research shows that building a connection to employees is key to health engagement. Evidence strongly shows that
success extends beyond individual programs. The way forward includes two important dimensions:

Taking a holistic approach

Many of the wellbeing challenges cluster and are strongly linked to work experience
Engaged employees are more open to their employers involvement in personal matters
Strengthen alignment between talent management and rewards experts within your organisation
Dig deeper into the motives of employees
Adopt segmentation techniques to better understand your employees and what buttons to push
Connect with employees at the personal level

While employers can play a significant role in alleviating stress through thoughtful workplace policies and practices, this will
extend beyond simply providing appropriate benefit programs. The move towards establishing a culture of health is a long-term
journey and understanding employee needs and establishing a sincere interest in employees wellbeing will be key
to success.

There are gaps between employer and employees views on drivers of stress.
Drivers of Stress

Employer View

Employee View

Lack of work/life balance (excessive workloads and/or long hours)

Inadequate staffing (lack of support, uneven workload or performance

in group)

Unclear or conflicting job expectations

Technologies that expand availability during nonworking hours

(e.g., mobiles, notebooks)

Fears about job loss, too much change

Lack of supervisor support, feedback and not living up to their word

Organisational culture, including lack of teamwork, tendency to avoid

accountability and assign blame to others

Lack of technology, equipment and tools to do the job

Low pay (or low increases in pay)

Fears about benefit reduction/loss (e.g., lower value or loss of health

care coverage, reduction in retirement benefits)

10

10

Source: 2013 Towers Watson Global Benefit Attitudes Survey

Note: Companies responding 3, 4 or 5 on a 5-point extent scale. Employees given a choice of their top three sources of stress.

16 towerswatson.com

When determining which benefits to offer, it is little

surprise that employers take into account costs,
both implementation (72%) and ongoing (69%), to
a great extent (Figure 8). Employers also recognise
the importance of upper management buy-in,
with three in four (75%) taking this into account
to a great extent. Seeking management buy-in
before any potential benefit change is particularly
important to ensure the successful approval of the
business case.

Figure 8. To what extent is each of the following factors taken

into account when determining benefits to offer?

3 2
72

Costs (implementation)

23
4 2

69

Costs (ongoing)

25
3

Organisation performance

48

Market benchmarking/
competitor strategies

43

Surprisingly few companies (22%) take their

employees views into account to a great extent
when determining which benefits to offer. More
than double that number (43%) consider market
benchmarking/competitor strategy. Whilst knowing
what the competition is doing is of interest, making
sure that benefits meet employees needs is likely
to ensure much more targeted use of an employers
benefits spend.

41

11
3

41

13

43

12
3

Organisation culture

36

Economic conditions

48

23

Employee opinion

22

13

47

32

Claims data

Health risk data

38

Organisation objectives

Taking into account employee opinion is essential

to creating an effective benefits program that has
relevance across a multigenerational and diverse
workforce. Particularly as organisations grow, or
as their workforces mature, the needs of their
employees will evolve.

Approximately twice as many employers refer

to market benchmarking to a great extent
compared to taking into account employee
opinion. This is likely to be the wrong priority
for employers looking to maximise value from
their benefit programs.

3 4

18

75

Buy-in from upper management

40

26

11
4

21

53

16

18

29

42

To a great extent

To a moderate extent

To a slight extent

Not at all

13

Figure 9. What do you believe your flexible benefits/employee

choice plan has been successful in achieving?
0%

20%

40%

60%

80%

Promotes employee understanding/appreciation of benefits

67
Recognises the diverse needs and values of the workforce
66
Improves attraction and retention
59

We asked those employers that have instituted a

program of flexible benefits what they felt it had
been successful in achieving. As Figure 9 shows,
besides recognising the diverse needs and values
of the workforce (66%), which would be expected
from flexible benefits, two thirds of employers
felt that their flexible benefits program had been
successful in promoting employee understanding
and/or appreciation of benefits (67%) and improving
attraction and retention (59%).

Helps the organisation remain competitive

53
Improves employee engagement
50
Reinforces the concept of total rewards
43
Makes the organisation an employer of choice
41
Promotes employee understanding of cash value of benefits
38
Reinforces company culture/objectives
36
Reduces/contains the cost of total rewards
24
Other
3

2015 Asia Pacific Benefit Trends 17

 Towers Watson View

While most employers offer traditional benefits such as medical inpatient, outpatient and annual leave, these types
of packages tend to be seen as a given. To truly differentiate themselves, employers need to be more innovative in
their offerings.
Health benefits in particular present a shifting landscape. Employees, and especially young workers who are just entering the
workforce, are changing the definition of what constitutes health it no longer means simply avoiding illness, but is a more
holistic concept that encompasses wellbeing. It includes good nutrition, regular exercise, managing stress and achieving
work/life balance. Offering health benefits using a narrow, medical definition of health is no longer sufficient.
Along with the type of benefits offered, benefit plan structure is important too. Despite the climbing price tag on benefits,
we have seen that few employers plan to cut back on them in fact, 37% plan to increase the number of benefit programs
offered (Figure 6, page 12), a number that has crept up from 2013 when only 33% said the same. Rather than increase
benefits across the board, employers may see more impact from offering employees a flexible benefits plan instead one
that allows individuals to choose which benefits are important to them from a menu of options. These plans are still not
widely used in Asia Pacific, giving employers that do offer them the advantage of differentiating themselves.
Below, we suggest an easy checklist to kickstart a program of flexible benefits in your organisation.

Checklist to kickstart a flexible benefits program

To implement a successful flexible benefits program, its important that companies focus on the following key factors:
Make sure benefits are aligned to employee needs and values
Think big, but start small keep it simple
Engage management to support the change
Ensure technology and administration processes complement the plan design
Plan the communications carefully create a strong brand

The following key steps should be considered:

Complete a feasibility study to see whether a flexible benefits program is right for your company
by carefully balancing the business needs and cost/risk management against the needs and
values of employees.

Consider carefully how you gather employee opinions on benefits. Traditional surveys may not
be optimal as often there are employee knowledge gaps around benefits. Hosted focus groups
with voting software can make the experience fun for employees and enable quantitative
inputs as well as qualitative feedback which can be invaluable for the business case.

Design the flexible benefits program based on the findings of the feasibility study. Just doing
the same thing as the competition may not necessarily be the right fit. Leave room for future
improvement map out a future journey plan for benefits.

Implement your flexible benefits program using a leading technology solution and streamlined
administration processes to deliver an engaging employee experience.

Review the program regularly through utilisation analysis and employee feedback and
update it to meet the evolving needs of your employees and the changing benefits landscape.

18 towerswatson.com

 Section Three:
Value Perception

From Figure 2 (page 8), we saw that the

second-most cited objective of employers
benefit strategies is to improve employee value
perception of benefits. In this section, we will
take a closer look at how successful employers
have been in that aim.
As Figure 10 shows, less than one in six (16%)
of employers feel that their benefits are highly
valued by employees. Looking at perceived
value by benefit spend (Figure 10b), while there
is some increase in those companies that say
benefits are highly valued at the higher levels
of benefits spend, the increase is certainly not
proportionate. There is an 8 percentage-point
jump in companies that say benefits are highly
valued (from 15% to 23% as spend increases);
yet, the difference in the actual spend for
these companies is on average at least 20%
of payroll.

Figure 10. Overall, do you think employees sufficiently value the

benefits provided to them?
0%

20%

40%

Yes benefits are highly valued

16
Yes benefits are sufficiently valued
37
Yes benefits are somewhat valued
38
No benefits are not valued enough
14
No benefits are not at all valued
*
Dont know
2

*Less than 0.5 per cent

Figure 10b. Perceived value of benefits by benefit spend

Less than 20% of payroll

15

20% to <30% of payroll

14

17

68

12

74

30% to <40% of payroll

22

40% or more of payroll

23

64

14

65

12

Yes benefits are highly valued

Yes benefits are valued sufficiently/somewhat
No benefits are not valued enough/at all

2015 Asia Pacific Benefit Trends 19

Figure 10c. Perceived value of benefits by gathering of

employee insights about programs
Yes, we do gather
employee insights

18

No, we do not gather

employee insights

12

70

68

What does seem to have a noticeable impact on

perceived value is whether employee insights are
taken into account when determining which benefits
to offer (Figure 10c). The number that said that
their benefits were highly valued jumped three times
for companies that do take into account employee
insights compared to those that do not. And perhaps
more importantly, for companies that do not take
into account employee insights, over one quarter of
employers think that their benefits are not valued
compared to only 12% for companies that do.

26

Yes benefits are highly valued

Yes benefits are valued sufficiently/somewhat
No benefits are not valued enough/at all

Figure 10d. Perceived value of benefits by effective

communication of benefits
Yes, we communicate
benefits effectively

20

71

No, we do not
communicate 5
benefits effectively

66

28

110

The

number of employers that

said that their benefits were
highly valued increased four-fold
for companies that believe they
communicate benefits effectively
compared to those that do not.

Yes benefits are highly valued

Yes benefits are valued sufficiently/somewhat
No benefits are not valued enough
No benefits are not valued at all

Figure 10e. Overall, do you think employees sufficiently

value the benefits provided to them? (Those answering not
sufficiently/not at all)
Region
14%

0%

20%

40%

Thailand
24
India
22
Japan
16
Indonesia
16
Taiwan
15
China
14
Hong Kong
12
Vietnam
11
Singapore
10
Philippines
9
Malaysia
8
South Korea
6

20 towerswatson.com

We see a similar impact on perceived value when

we consider whether the organisation effectively
communicates benefits (Figure 10d). The number
that said that their benefits were highly valued
increased four-fold for companies that believe they
communicate benefits effectively compared to those
that do not.

When looking at how benefits are undervalued

across countries (Figure 10e), we see that
employers in Thailand and India may be facing the
largest gap in perceived value. More than one in five
employers in these two countries said that benefits
were not valued either sufficiently or at all.
Costs in Thailand are amongst the highest as well,
with 49% of employers spending more than 20% of
payroll on benefits (Figure 4b, page 10). Companies
here are focusing on improving the perceived value
of their benefits by improving communication (for
63% of companies in Thailand, improving employee
communication was the top response when asked
what actions they plan to take next year).

When asked which benefits are most valued by

employees, employers responded with the traditional
items: medical, and annual leave (Figure 11). Only
approximately one quarter (26%) cited retirement
benefits, and even fewer cited benefits such as
medical screening (19%) or lifestyle (7%).

Similarly, employers feel that the most valued

health-related benefits are diagnostic tools such as
health risk assessments and biometric screenings,
with fewer thinking that employees appreciate
more interventional benefits such as EAPs (29%) or
stress management (25%).

Figure 11. Which benefits doyou think are most valued by your employees?
General benefits top 10

Health management top 10

Medical inpatient

62%

Health risk assessment/appraisal

56%

Medical outpatient

58%

Biometric screening

40%

Annual leave

56%

Employee Assistance Program (EAP)

29%

Pension benefits

26%

Occupational health and safety

29%

Medical screening

19%

Stress management

25%

Life and AD&D insurance

15%

Get active/walking programs

15%

Critical illness and/or disability insurance

12%

Lifestyle behaviour coaching

15%

Housing allowance

8%

Diet and nutrition counselling

13%

Lifestyle (e.g., gym membership)

7%

Weight management

10%

Education allowance

6%

Chronic condition management

9%

The Value of Retirement Security

Towers Watsons 2014 Global Workforce Study found that 44% of employees worry about their current financial state, and
even more (51%) worry about their future financial state. To add to this anxiety, governments are gradually pulling out of the
retirement space, causing a greater burden to be placed on the individual.
Towers Watsons Global Benefit Attitudes survey found that a majority of employees in markets such as India and China agree
with the statement, my retirement plan is an important reason I decided to work for/will stay with my current employer,
signaling that retirement schemes have significant attraction and retention value.
In addition, when employees were asked to rank different forms of compensation increases including higher base pay,
superior retirement, bonus opportunities, more paid time off, more flexible working conditions, etc. higher base pay came
first and superior retirement benefits second. Many employees are even willing to accept lower salary increases in exchange for
superior (more secure) retirement benefits. In India and China, the preferences for greater retirement generosity are 12 to 18
percentage points higher than those for equivalent salary increases.
This leads us to ask whether Asia Pacific employers may be underestimating employees interest in retirement particularly
where in many countries the workforce is ageing rapidly. Only 26% ranked retirement benefits as a valued benefit many
more thought that annual leave is more important to employees. This also underlines the importance of segmenting your
workforce while younger employees may place a higher value on annual leave compared to retirement, it is unlikely that older
employees do so.

2015 Asia Pacific Benefit Trends 21

 Towers Watson View

Employers face a gap between the amount of money they spend on their benefit plans, and the value that employees derive
from that spend. And simply spending more does not help add value, in fact it may compound the problem by widening the gap
further.
There seems to be a direct link between the value derived from benefits and taking into account employee insights when
choosing which benefits to provide. This sounds logical employees will naturally value benefits that they themselves have
expressed an interest in having. Taking into account employee insights may make the employee feel like a valued stakeholder
in the organisation, and that their views are important. It might also make them feel more engaged in their benefits plan. This
also gains significance as employers try to hold employees accountable for their benefits plan.

22 towerswatson.com

 Section Four:
Communication and Administration

For any companys benefit strategy to be effective,

benefits must be communicated appropriately. As
we found previously (Figure 10d, page 20), those
employers that feel they effectively communicate
about their benefits also had a much higher
percentage (20% vs. 5% of companies that do
not communicate effectively about benefits) of
employers saying that their benefits are highly
valued.
Communication strategies will vary depending on the
type of organisation, the make-up of the workforce,
the industry the company operates in, and so on. We
found that employers across Asia use a variety of
methods to communicate with their workforce about
benefits approximately half (49%) use email;
28% use either an online benefit portal or an online
total reward statement; and 23% use a paper-based
method (Figure 12).
However, we also found that more than a quarter
(27%) of employers still do not communicate with
their workforce about benefits. While this number
has fallen slightly from 2013, when 31% said the
same, it is still startling when viewed in context
of how much employers are spending on benefits.
Those who currently do not communicate to their
employees about their benefits package could find
that doing so would be a relatively easy way to see
better value from this spend.
Four in 10 (41%) of employers use a combination
of methods to administer benefits from in-house,
paper-based to outsourced to a broker or other
third party (Figure 13). Using a combination of
administration methods runs the risk that benefits
are not presented as a total package to employees.
A combined approach also makes the management
and governance of benefits more difficult for
employers.

Figure 12. Do you actively report to employees about their

benefits?
0%

25%

50%

Yes email communication

49
Yes paper-based
23
Yes online benefit portal

In total, 28% are

using online tools
to communicate
their benefits.

22
Yes online total rewards statement
10
Yes paper total rewards statement
6
No, but we plan to
16
No, and we have no plans to
11

Figure 13. How do you administer your benefits?

0%

25%

50%

In-house, paper-based
26
In-house, online
14
Insurance company
7
Outsourced to a broker
7
Outsourced to a third party
5
Combination of the above
41

More

than a quarter (27%) of employers

still do not communicate with their
workforce about benefits.

2015 Asia Pacific Benefit Trends 23

 Towers Watson View

The communication and administration of benefits are effectively the shop window of a benefits plan. This is the public view
that employees see, and therefore will shape their perception of it. If a benefits plan is well thought-out and caters to diverse
employee needs, but is not communicated, the value of the plan is at risk.
Its important to remember that there is no right way to communicate how an organisation can most effectively
communicate will depend wholly on its circumstances, including the makeup of its employee population, its strategic goals, its
organisational culture, and so on. Below, we suggest a simple plan for building an effective communication strategy.
Similarly, if a benefits plan is cumbersome to administer and involves many different platforms and lots of paperwork, it
will not only be viewed negatively by employees, but will also be a burden to the HR department, and take focus away from
more strategic matters. Its important to ensure that the administration, processes and technology are fully aligned with the
organisations benefits strategy and objectives.

How to build an effective communication strategy

KNOW

Begin with robust and rich employee data. This will tell you how to engage your audience and drive
behaviour change.

BUILD

Develop a strategy that sets a direction and a roadmap of how to get there bringing employees
and stakeholders along.

LAUNCH

24 towerswatson.com

Based on the approach outlined in the strategy, launch a communication campaign to build
awareness and understanding among employees and other stakeholders of their benefit program
under the new visual brand.

 Conclusion

Employers across Asia Pacific invest significant time and

resources in their benefit plans. Employers understand
that, when used effectively, a benefit strategy can be a
powerful tool in the attraction, retention and engagement
of key talent.
However, many challenges lie in the way. Foremost
among these is the cost of benefits, which continues
to rise. With over 40% of employers spending more
than 20% of payroll on benefits, it is imperative that
employers maximise the value of their benefits in
new and innovative ways. Increasing the value that
employees derive from their benefits, however, is not an
easy task. Only 16% of employers felt that the benefits
they offer are highly valued by employees.
Successful companies are likely to be those that do the
following:
Regularly gather employee insights, aligning benefits
to employee needs and making them stakeholders in
their benefits program
Differentiate benefits rather than just using
benchmarking to follow the market
Keep regular track of benefits costs and utilisation
and use the data to inform future decisions on
benefits strategy

Communicate benefits regularly, in simple doses, and

using a combination of media to appeal to different
segments of the workforce
Look for ways to make benefits more flexible and
more likely to address a variety of employee needs
Use technology to make benefits accessible and
engaging for employees, as well as enhancing
benefits administration and governance for the
employer.

For more information, please contact your Towers

Watson consultant or:

Andrew Heard
Managing Director Asia Pacific Benefits
andrew.heard@towerswatson.com

Chris Mayes
Director Benefits Optimisation Consulting, Asia Pacific
chris.mayes@towerswatson.com

Mark Whatley
Director Benefits, South East Asia
mark.whatley@towerswatson.com

About Towers Watson

Towers Watson is a leading global professional services company
that helps organisations improve performance through effective
people, risk and financial management. With 15,000 associates
around the world, we offer consulting, technology and solutions in
the areas of benefits, talent management, rewards, and risk and
capital management. Learn more at towerswatson.com.

Copyright 2015 Towers Watson. All rights reserved.

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