Employers in the emerging markets of Asia Pacific face the dynamic realities of significant economic growth as well as increasing employee health risks and rising demand for services. Employers are becoming more aware that the health of their employees is key to their ongoing success and that there are huge costs associated with not having a healthy and engaged workforce.

Indeed, this is a complex issue. In a continuing war for talent, Asia Pacific firms experience high rates of turnover and absenteeism with increased employee stress and growing talent gaps in most industries. Their challenge is to evolve a broader employee value proposition – one that goes beyond compensation to additionally emphasize health care and choice programs − and help fashion a competitive edge based on differentiation and employee engagement. Yet employers are constrained in what they can offer employees due to rising health care costs.

For insight and data on this timely challenge, we undertook research on the dual fronts of employers’ benefit programs and employees’ attitudes. For a start, there is Mercer’s Asia Pacific Total Health and Choice Benefits 2011 Survey Report, which covers almost 900 employers (of which 87% were multinationals) and is an important barometer of how organizations are coping in this demanding benefits landscape. The survey explores the current state of employers’ health and wellness programs, what choices they offer, and future plans for their programs.

If anything, the results of this survey highlight the importance in Asia Pacific of differentiating and positioning your organization for continued growth while containing the rising cost of health care. Thus, many employers are seeking cost-effective and innovative choice and wellness programs to help tackle their talent and employee health care issues.

What’s working for Asia Pacific employees

In addition, there are important insights to be gleaned from Mercer’s 2011 What’s Working™ survey, an ambitious research project conducted by Mercer between Q4 2010 and Q2 2011 among nearly 30,000 workers in 17 markets worldwide.

Relying on more than 100 questions covering pay, benefits, careers, leadership, performance, engagement, communication and more, the survey captures employee views regarding their experiences in the workplace. It is designed to reflect overall workforce demographics (age, gender, job level) in each market and utilizes sophisticated conjoint analysis to show which elements employees value most in the employment value proposition. Because Mercer conducts this research periodically, prior data are available for most markets to highlight year-over-year changes and trends.

The survey sampled local employee populations − from Canada to Argentina, the Netherlands to Spain, and throughout Asia − and the results revealed a number of notable trends despite cultural and geographic differences. Key findings tell us that employee loyalty is eroding across all markets, as increasing numbers of employees (from one-quarter to one-half in each of the markets surveyed) are seriously considering leaving their organization.

Let’s look at some of the survey’s market snapshots for Asia Pacific. In China, 34% of Chinese workers surveyed are seriously considering leaving their organization, up from 18% in 2004. This figure is highest (39%) among workers between the ages of 16 and 24. Another concern is that the 23% who didn’t commit to staying or leaving are the least satisfied and engaged of all. Benefits rank sixth in importance among value proposition elements, but only 50% of Chinese workers rate their overall benefits package as good or very good, down from 58% in 2004. On a positive note, 66% say their organization has done a good job of communicating about benefits, up from 61% previously.

In Hong Kong, 39% of surveyed workers are seriously considering leaving their organization. This figure is even higher among younger workers: 46% of employees between the ages of 25 and 34 are seriously considering leaving, along with 41% of those who are 24 and younger. Only 48% feel a strong sense of commitment to their organization. In addition, Hong Kong employees are generally dissatisfied with benefits. Only 39% rate their overall benefits package as good, and a similar proportion (40%) say the benefits provided by their organization meet their needs or are as good as or better than those offered by other organizations in their industry.

In India, 54% of surveyed workers are seriously considering leaving their organization, a substantial jump from 26% in 2004. Women appear to be more disaffected, with 58% considering leaving, compared with 53% of men. In addition, 66% of workers who are 24 and younger are looking to leave, despite having the highest satisfaction with their organization (82%). Meanwhile, benefits satisfaction has declined. Today, 67% of workers rate their benefits package overall as good, down from 73% in 2004.

Forty-two percent of Singaporean workers are seriously considering leaving their organization, up from 38% in 2004. Although women responded much less positively on most survey questions, they are also less likely to leave their organization (35%), as compared with their male counterparts (46%). Nearly half of workers (49%, up from 36% in 2004) rate their overall benefits package as good, with women (42%) posting lower scores than men (54%).

Health, wellness, engagement

Facing these complexities and the shifting dynamics of worker attitudes, the vast majority of employers across Asia Pacific do not have an integrated or strategic approach to health and wellness management, but more than half of respondents to Mercer’s Asia Pacific Total Health and Choice Benefits 2011 Survey indicated a desire to implement more programs. Most employers provide well above the statutory health requirements. 
 
The most popular health programs are annual employee health checkups (84%), biometric screening tests (59%) and health talks/health fairs (49%). Firms want to and should invest in more innovative and interventional programs in the next two years through expanded use of health risk assessment questionnaires (47%), stress management (46%) and chronic disease management (43%).

In general, employers are recognizing that including families in their policies is a key differentiator and a highly valued benefit for employees:

• Fifty-two percent of the companies surveyed provide health management programs to their employees’ children.

• Forty percent cover employees’ spouses.

• Thirteen percent provide programs to parents.

• Five percent cover retirees.

Specialist health and wellness vendors are only now starting to emerge in Asia Pacific, with much provision still delivered in house or by insurers/brokers and often managed by HR. Significantly, an increasing number of employers are placing greater importance on the value of an integrated health program, with a prime focus on its impact on improving employee health, retaining key talent, containing costs, and improving engagement and productivity.

The power of choice

Faced with these new realities, employers view choice in benefits as a potentially important lever to pull when addressing the economic challenge of cost containment, especially given the high rate of medical inflation in many of the countries participating in this survey.

Across the region, we continue to see a range of participation in “choice”; 39% of employers today continue to offer more-traditional benefits, with a “one size fits all” approach, while another 42% do vary their benefits program by employee grades but still without choice. 

• Fifty-nine percent of employers that don’t currently offer choice but support choice indicated their intent to provide choice within three years. 

• Sixty-one percent indicated support for providing some form of choice. Respondents from the business process outsourcing/call center (77%) and pharmaceutical and health care (73%) industries were followed by the financial services (69%) and high-tech and technology (62%) industry sectors.

• Thirty-seven percent of employers that don’t offer choice today (but indicated support for providing some form of choice) cited “attracting and retaining talent” as the top driver for wanting to do so.  

• Nineteen percent of employers allow some degree of choice in the benefits their employees are receiving – while all employees have some choice at 11% of companies, only certain employees have choice at 6%, and all employees have a great deal of choice at only 2% of companies.

Medical and life insurance are among the most common benefits offered. Dependent benefits and lifestyle and wellness perks are also typically included within a flexible or wellness spending account in employee choice programs. This addresses the needs of Gen Y employees who are more focused on and interested in benefits such as gym memberships, health and fitness programs, vacations, and personal development.

Twenty percent of respondents in China do provide some form of choice in employee benefits, followed by Singapore (19%), Hong Kong (17%), Taiwan (16%), India (15%) and the Philippines (12%).

Overall, 81% of employers agree that their choice programs have met their original objectives. They also have received a strongly positive or positive response from their employees to the choice program. No negative employee responses were reported. However, these organizations would like to see changes in the future: increased choices and flexibility (40%), simplified plan design (10%), and simplified administration rules and processes along with lower cost (each 9%).

Conclusion

Ultimately, the power of choice is but one dimension of an Asia Pacific awakening to the complex challenges discussed in this article − but it’s a dimension that seems destined to grow. If anything, the strong positive response from employees is a good validation of the impact choice programs can have and the advantages and benefits they offer, especially since 97% of surveyed companies with an employee choice program indicate they will continue with their existing program. As companies are faced with the need to contain costs, retain key employees and engage workers, choice is emerging as one of the strongest competitive tools in the Asia Pacific HR arsenal.