Companies can increase efficiency by addressing staff expectations regarding employee benefits
|Jason Sadler (left), managing director, insurance business Hong Kong
HSBC Insurance (Asia) Limited
Alex Chu, director and head of employee benefits business
HSBC Insurance (Asia-Pacific) Holdings Limited
Photo: Wallace Chan
Employee benefits are key to attracting and retaining staff. Good benefits not only contribute to a stable workforce but also boost business performance. By bridging the gap in terms of employee benefits provided and those expected by employees, companies can reduce staff turnover and in turn increase cost effectiveness.
About 53 per cent of the employees interviewed for a March survey by HSBC Insurance ranked employee benefits as a priority, while employers listed this item only seventh in terms of importance.
The survey involved 261 employers and 617 employees. About 52 per cent of employees mentioned a poor benefits package as their main reason for potentially leaving a job. This was followed by 41 per cent citing inadequate career development opportunities and 38 per cent blaming poor company performance and instability.
Of the employers surveyed, 41 per cent believed company performance and stability were the main factors driving employees to stay with their companies or to leave. Other major factors included relationships with colleagues (39 per cent) and performance appraisal and recognition (34 per cent).
The results of the HSBC survey suggested a possible misallocation of companies' resources in their efforts to keep quality staff.
"While 32 per cent of employers believed improving internal communications would help retain staff and put a lot of effort into improving it, only 16 percent of employees considered this aspect important," notes Jason Sadler, managing director, insurance business Hong Kong, HSBC Insurance (Asia) Limited.
He adds that performance appraisal and recognition were ranked last in terms of reasons for employees to stay with their companies, although employers perceived these factors as among the top three drivers.
There was also a discrepancy between the types of benefits on offer and those desired by the majority of employees. The survey findings revealed that employees saw year-end or performance bonuses, five-day work weeks and outpatient hospital coverage as the three most important benefits. However, only 18 percent of employers offer outpatient coverage.
Taking care of staff's overall wellbeing can be an effective way of fostering loyalty and workforce cohesion. The survey found that healthcare and medical insurance (64 per cent), subsidies or allowances (57 per cent) and paid leave (54 per cent) were the most-wanted employee benefits, followed by retirement and lifestyle-related benefits.
Such benefits offered by employers tended to be discounts on company products or five-day work weeks, but employees wanted more protection-related items such as outpatient and hospitalisation coverage.
"The cost of offering hospitalisation or medical coverage is low, which means there is room for improvement in employee benefits packages," says Alex Chu, director and head of employee benefits business, HSBC Insurance (Asia-Pacific) Holdings Limited.
The gap between what companies perceive their staff to want and what their employees actually need may lead to a high staff turnover and additional staff planning costs, Mr Sadler adds.
While the survey indicated that 61 per cent of employers saw employee benefits as a motivator to increase staff engagement, and 15 per cent believed such benefits could help reduce staff turnover over the next year, the vast majority (95 per cent) had no plans to adjust existing benefits.
Mr Chu believes employers are hesitant to review their employee benefits packages, partly because they want to control costs in the current economic circumstances.
"On average, employee benefits account for about 10 per cent of a company's staff expenditure. Employers could benefit from consulting their financial providers to look at their current benefit packages in order to identify and bridge gaps," he advises.
"Companies of different sizes may have different employee benefits needs," Mr Chu explains. "Provided that the available budget remains unchanged, a single service provider can offer an all-round analysis of a company's current employee benefits packages and help identify discrepancies to address employees' needs."
This can lead to greater flexibility and efficiency in deploying company resources, in turn helping to build a stable workforce and eventually expanding the company's business, Mr Chu concludes.
- Employee benefits are a key motivator for staff retention
- A gap exists between what employers offer and what employees expect
- Failure to address employee needs can increase staff turnover
- Getting a single provider to draw up benefits packages can increase efficiency