6 January 2023
Employees are always motivated to stay in companies that best fit their career goals and offer the best employment packages. But between employee benefits and salary, which one brings more satisfaction to employees? To find out more about this as well as the key differences between how employees perceive the two, DigitalCFO Asia spoke with Clarence Zhang, Co-founder and Country Manager for Malaysia Mednefits to get his insights on the topic.
Global Shift In Medical Priorities For Employees In 2022
In 2022, the talent market continues to be challenged by the enduring after effects of the COVID-19 pandemic and rising healthcare costs that outpace inflation. According to the 2022 Employee Benefits Trend Report published by Mednefits, medical benefits are seen as an additional cost by 3 out of every 10 businesses. At the same time, we see an increasing proportion of SMEs view benefits as a way to generate greater employee engagement, and are starting to pivot away from just seeing benefits as a mere means of medical coverage policies.
In 2022, we all know of The Great Resignation phenomenon where companies struggle to retain employees and attract new talents. Topics surrounding employee benefits, engagement and general welfare began to surface and became the mainstay in discussions between HR personnels and bosses.
“There has also been a significant shift in employees’ needs, with a preference for non-medical needs on top of just basic hospitalisation and GP coverage,” says Clarence Zhang, Co-founder and Country Manager for Malaysia Mednefits.
This alludes to the inherent limitation of the traditional benefits model which is evidently unable to keep up with the changing demands of today’s workforce.
Salary Increments In 2023
“With the current economic outlook being highly uncertain, and many speculations of an upcoming worldwide recession, there has undoubtedly been a correction of talent flow within the labour market,” says Clarence Zhang, Co-founder and Country Manager for Malaysia Mednefits.
Salary increment is highly dependent on the job market performance, which will differ for each company in different industries, in the respective countries. Companies might find themselves considering other forms of compensation other than salary increments, such as an increase in the benefits package for employees.
After all, flexible benefits are gains or profits, which could be monetary or non-monetary (but largely monetary), that an employee benefits from during employment. Therefore, this posits that there are still a lot of creative ways that a company can engage in to show that they genuinely care and wish to take care of their employees.
If employees were to acknowledge and consider the increase in benefits as an aggregated increase in their monthly compensation, then it is likely that we will see salary increments rise to pre-pandemic levels in 2023 in well-performing industries because they will be finding all ways to attract and retain the best talents out there amidst a labour market that is experiencing a correction.
Flexible Benefit Programmes To Retain Employees In The Long Run
There is an increase in demand by corporations for onsite events, as we’ve seen spending increase by 2 folds within the last 6 months. The proportion of SMEs viewing flexible benefits as a way to generate greater employee engagement is 49%, which is not very far off from the 60% we see in MNCs.
Examples of such events or programmes include Health Screening, Optical Screening, Yoga programmes, Group Fitness Classes, and Health Talks (Topics range from within the Traditional Chinese Medicine realm, to Specialist education to better manage chronic diseases). For companies with a younger workforce demographic, we see financial literacy talks, breathing seminars, and mental wellness workshops being conducted as well.
However, in order to better retain employees in the long run, companies need to consider more than just wellness-related onsite events and programmes. A flexible benefits package for employees should always be dynamic simply because the needs of employees differ based on age, lifestyle, lifecycle, job scope, etc. As such, corporate wellness programmes should only at best be considered as a cherry on top of the cake if the company has extra budget.
Individualised Benefits In Improving A Company’s Financial Health
“The idea of providing individualised benefits to employees means that the benefits package is largely personalised for the employee to best suit his needs, which increases the benefits relevancy to him,” says Clarence Zhang, Co-founder and Country Manager for Malaysia Mednefits.
Although this leads to an outcome that is seemingly contrary to what employers want – employees end up utilising more of their benefits and costing the company even more, what is happening here is the promotion of shared responsibility of a budget between employee and employer. This essentially shifts the control of budget from employer ONLY to employee AND employer.
Shared responsibility is an ideal state, and clearly a superior solution for companies that deem MC abuse as a detriment to the company’s financial health. In the long run, the company will get employees who fall sick less often, are more proactively using the company’s allocated budget fully and become more productive and happy at work. This would translate to increased output for the company and is ultimately the most sustainable way to improve the company’s financial health.