PH firms top spenders on employees’ benefits in ASEAN – poll

MANILA, Philippines – Philippine firms spend more on employees’ benefits than their counterparts in the Association of Southeast Asian Nations (ASEAN), the findings of a regional survey showed.

The findings of Towers Watson’s 2015 Asia Pacific Benefit Trends survey also showed that the Philippines is among the leaders in Asia in terms of spending on workers’ benefits. Two of its authors discussed the findings at the Benefits Innovation Summit  in Makati City on Thursday, May 6.

“Philippine companies are the top in ASEAN and one of the top in Asia in terms of benefits relative to payroll and we are seeing some perceived value but there’s still a long way to go to improve that,” said Chris Mayes Director of Benefits Optimization Consulting, Asia Pacific at Tower Watson.

Based on the survey findings, 20% of Philippine employers said they provided benefits amounting to 30-40% of the payroll range, while 18% said their benefits to employees amounted to 40% or more of the payroll. 

This made Philippine employers the highest spenders in the ASEAN and among the highest in Asia, in terms of employees’ benefits.

PH employees unaware of benefits?

Mayes suggested that employees of Philippine firms may not be aware of all the benefits they are receiving.

“Just under a third of  Philippine companies are not communicating benefits at the moment so there’s a real risk for them that their employees are not understanding and therefore not valuing the benefits,” Mayes said.

He added that companies that give out employee benefits that deal with life events, such as a change in someone’s life, birth or a death, are seeing a higher perceived value.

Around a third of companies are saying they will introduce or increase  flexibility in benefits in the next 12 months and therefore align benefits to individual lives.

Mayes said he thinks such moves might be too ambitious as “they have a lot of actions planned for this year compared to what they achieved last year.”

The first priority, he said, should be to prioritize those actions to work out what’s most effective and efficient for their organization.

Another potential pitfall is throwing more money at the problem in the hopes of creating more perceived value.

“Slightly more than 30% of local respondents are looking to increase the benefits  but that’s quite a dangerous approach because you’re just going to add to your costs.  The Philippines is already the highest,” said Mark Whatley, Director of Benefits, South East Asia at Tower Watson.

Companies should carefully consider employees needs when deciding on a benefit package as under the government’s non-diminution of benefits law, once an employer gives a benefit, it can’t withdraw it.

“The law is very strong on the part of employees here, and it makes it a bit tricky for employers who are looking to reformat their benefits package.  But I think there is enough benefit cover offered over the government mandated coverage to give employers quite  a lot of flexibility in what they do,” Whatley said.

‘Communicate benefits’

He noted that local firms are actually quite flexible with their benefits with the number of employers that provide employee choice or flexibility at around 26-28%, which is comparable to developed countries such as the United Kindom.

“The companies that increase flexibility and make more of what they’re doing already and communicate them better will see a better return on investment than those who just pay more,” Whatley said.

The survey findings showed that benefit costs continue to rise around the region and were cited by over 75% of respondents as a major challenge, cosidering that  4 in 10 employers spend over 20% of payroll on benefits.

Despite the significant expenditures on benefits, only 16% of the respondents say that their employees highly value their benefits.

The survey  also found that employers that communicate benefits effectively and take employee insights into account when determining which benefits to offer see higher value in their benefits programs.

The survey, which had 1,145 employer-respondents in 20 countries across Asia, tracks trends in Asia Pacific-based employers’ benefit plans and strategies, with a particular focus on cost and value perception amongst employees. 
– Rappler.com