Article: What benefits worked in 2019 will help plan for 2020

Strategic HR

What benefits worked in 2019 will help plan for 2020

In 2020, organizations should expect to put a greater focus on data management and integration for their benefit programs. In Asia Pacific, this is an emerging priority second only to the ongoing concern for legal and regulatory compliance.
What benefits worked in 2019 will help plan for 2020

The present is a living and changing thing, providing new possibilities and opportunities for a rapidly-approaching future. Leadership navigating this landscape requires not only understanding the situation as it is now, but also noticing the trends that give a glimpse of what is to come.

In 2019, we saw organizations in Asia Pacific update their benefit programs, a process that is likely to continue in 2020. The task calls for employers to pay attention to current trends and the impact these could have on how benefits are viewed, experienced and understood. 

  • Leadership looking to prepare their benefit programs for 2020 and beyond should ask questions such as:
  • Is the benefit package suitable for their workforce in the long-term in view of the changes in their workforce?
  • Can the organization sustain the costs of the programs with their varied employee needs for the future?
  • Is the organization prepared for disruptions that technology will bring to the way it manages and delivers their program?
  • What should an employer do to prepare for the changing landscape of broadened benefits design definition and how can they design for the future?

There are reasons to be excited about what the future will bring while also keeping in mind the planning and adaptability required to succeed in it. Using data as a modern-day oracle for the future of benefits gives employers the necessary foundation to build atop of and can provide clues as to what should be built above that foundation.

Benefits in 2019 and the past few years have been about coming to terms with changes. As we move into 2020 and beyond, benefits is about generating value for employers and employees alike.

Understanding the present to predict the future

Any attempt to understand what 2020 will bring requires looking at what is already here and what trends are likely to continue. For benefits, healthcare will remain a high priority and one key driving force, but the experience is one that is likely to be transformed with the advancement of technology. Ideas that were science fiction less than a decade ago are becoming healthcare realities.

Employees are the other major driving force in shaping the future of benefits, making it crucial to understand how they interact with programs and what they need. It also pushes for in-depth study of the design, with an eye towards accessibility and encouraging engagement. A daunting task, to be sure, but one that can be treated as a long-term investment that yields a breadth of returns.

Willis Towers Watson utilized research data to piece together a clearer picture of benefits as they stand in Asia Pacific and what direction the region is potentially headed. The data shows that some things remain as they are, some things are changing and organizations in the region have already begun to implement new programs or are planning to do so.

Developments shaping the future of benefits

Just what can organizations expect or plan to implement in 2020 and beyond? What challenges can they expect to face? And what immediate impacts will they need to prepare for?

Broader benefits definition, greater personal choice

The need to move benefit programs away from the traditional scope of benefits emerged in Asia Pacific in 2019, with a total of 68% of employers in the region looking to implement broader, more flexible benefit programs for their workforce.1 Choice is becoming a prominent theme in benefit programs that are focused on delivering an inward employee-centric experience rather than a broad and outward-facing approach.

Thirty four percent of employers in Asia Pacific plan to offer employees a choice in benefit level, with an additional seven percent already implementing this change.1 The freedom to determine how much is spent to fund which benefits drives employee engagement and lets them prioritize according to their needs and situation that is relevant to their current life stage.

The need to move benefit programs away from the traditional scope of benefits emerged in asia pacific in 2019, with a total of 68% of employers in the region looking to implement broader, more flexible benefit programs for their workforce

Flexible benefit programs are planned by 36 percent of organizations, with six percent having implemented them already and another 16 percent maintaining them from previous years.1 Freedom of choice and the ability to choose what to prioritize again drives this option, permitting employees to choose how employer money is used to either fully or partially fund selected benefits.

Voluntary benefits will also gain more prominence, with 32 percent of employers planning to act on this in the future.1 This allows employers to leverage on their purchasing power to curate lifestyle and personalized benefits items that will bring value to employees even though the employees will fund these optional benefits on their own, but the delivery and facilitation of them is still typically coordinated by the employer. 

In addition, employees today are also looking at other areas such as inclusion and diversity practices of the organization they are working for. For example, whether they can be involved in Corporate Social Responsibilities, flexible work arrangements, extended dependents coverage, and health and wellbeing activities. Even personal lifestyle choices and services are also creeping into the scope of benefits design.

How are employers adapting?

Technology is an enabler that allows for improved ways to engage employees and deliver benefits. Thirty seven percent of employers planned to use technology solutions to simplify benefit offerings, avoiding the pitfalls of overloading with choices. Using technology as a means of educating employees and drive engagement is also planned by 32 percent of organizations.1

In 2020, organizations should expect to put a greater focus on data management and integration for their benefit programs. In Asia Pacific, this is an emerging priority second only to the ongoing concern for legal and regulatory compliance.1

Aligning the employee perception with that of the employer will remain on the agenda for organizations in 2020. Three in four employers plan to survey employee opinions on their benefit programs, both ongoing offerings and planned changes. An increased importance of “value of investment” will drive employers to use non-traditional metrics to better understand how best to evaluate their benefit programs’ effectiveness.1

Rising costs of benefits remain a primary concern for employers, with 69 percent citing it as critical in their future. 58 percent of organizations plan to focus on managing operating costs in 2020 and the foreseeable future, while 53 percent plan to focus on generating a return of value on their benefit programs in the same period.1

The road ahead for employers in 2020

Any benefits modernization effort should be comprehensive, placing a focus on design and factoring in the costs, workforce experience, legal compliance and metrics of success. The use of new technologies and focused on enhanced communications can be a boon for employer and employee alike, driving efficiency and convenience, as well as improving engagement and experience. Organizations should position themselves to negotiate more favourable terms for employees while also driving effective benefits utilisation and awareness within their own organizations.

Technology is an enabler that allows for improved ways to engage employees and deliver benefits. Thirty seven percent of employers planned to use technology solutions to simplify benefit offerings, avoiding the pitfalls of overloading with choices

A modern benefit program does not require reinventing the wheel; it needs an approach that embraces the forward momentum of technology and employee needs, using that understanding to deliver a more impactful experience. Employers in 2020 will make their way through their challenges and utilize data to focus inward and deliver a benefit portfolio that meets the needs of their diverse workforce.

Organizations are moving towards a benefit program that is aligned with the personalized needs of their employees where the approach and attitudes are very different from conventional thinking. The more successful employers will be those that have a clear focus on an employee-centric strategy and be able to communicate benefits in a way that is well understood by the employees on the value of the program. 

 

 

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Reference:

1. Willis Towers Watson 2019 Benefits Trends Survey - Asia Pacific

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Topics: Strategic HR, #ExpertViews, #Rewind2019

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