THURSDAY, March 28, 2024
nationthailand

Some firms report little value for money spent on worker benefits

Some firms report little value for money spent on worker benefits

Thai companies are seeing a major gap between the money they spend on employee benefits and the value they get from them, according to Towers Watson.

This is a common finding among the 1,145 organisations across 20 countries in the Asia-Pacific region participating in the most comprehensive benefits-trends survey in the region.

The survey tracks trends in employers’ benefits plans and strategies with a focus on cost and value perception. In Thailand, 110 companies participated in the survey.

The findings illustrate the challenge for employers. Benefits are increasingly seen as an integral part of the employee value proposition – a reward lever to help attract, retain and engage employees.

In Thailand, more than 60 per cent of responding employers said improving attraction, retention and employee engagement are key objectives of their benefit strategy.

Benefit costs already represent a significant percentage of payroll. Almost half of employers said they spent more than 20 per cent of payroll on benefits, and one-tenth spent upwards of 40 per cent.

About 70 per cent of employers said rising benefit costs were a key challenge in delivery of their benefits strategy.

More than a fifth of employers said they didn’t know how much they were spending on benefits.

"This apparent lack of awareness about their benefits spends suggests that employers are struggling with benefits governance while juggling multiple systems, vendors and administrative platforms," Mark Whatley, director of benefits at Towers Watson Southeast Asia, said yesterday.

"If employers are finding it hard to put a number on their benefits spend, then it is perhaps no surprise that employees have low awareness of the value of their programme.

"A benefits programme that is aligned with employee needs, communicated clearly and delivered on one platform is likely to see better value attached from employees."

Despite the material spend on benefits, only 12 per cent of employers think they are highly valued by employees.

"It is worrying that almost a quarter of employers believe their employees do not value their benefits enough or at all, the worst result in the survey across Asia-Pacific," said Chris Mayes, director of benefits at Towers Watson Thailand.

"It is essential for Thai employers to focus their effort on improving the perceived value of benefits by employees, otherwise they will be unable to maximise the return on their significant benefit investment."

Across the Asia-Pacific region, an increase in spend did not necessarily correlate with an increase in perceived value.

However, perceived value of benefits increased when employee insights were taken into account by employers.

Perceived value of benefits also increased when employee life events were handled effectively and benefits were effectively communicated.

Introducing more flexibility into the benefits programme is one way that employers are looking to address the benefits value gap. For organisations that already offer flexible benefits, two-thirds felt that their programmes had been successful in promoting employee understanding and appreciation of benefits. About 60 per cent felt they had improved attraction and retention.

"Flexible benefits continue to be an effective way of delivering benefits and improving their perceived value to employees," Mayes said.

"Besides recognising the diverse needs of employees, offering flexible benefits necessitates regular communication to enable employees to make choices and put values on the various benefit items included in the programme.

These aspects help increase the value employees attach to their benefits."

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