What factors affect businesses’ strategies for employee benefits

Competition for talent and inflation concerns play a part in the benefits strategy.

Concern over competition for talent is the top factor in identifying employee benefits, with around 73% of organisations citing it as the top factor that influences their benefits strategies, according to a survey by WTW.

In The 2023 Benefits Trends Survey, WTW found that rising cost is the second factor that affects the decision on employee benefits at 55%. Inclusion and diversity concerns remain high at third place despite slightly dropping from 2021, followed by a flexible work setup.

However, WTW said businesses are faced with the challenge to balance their goal to improve benefits with effects of the inflation, with 59% saying that high inflation has a significant impact on their budget in the next two years.

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The survey also found that 52% view the weakening economy and business environment as key factors in their benefits programme.

WTW also found that the priorities of employers and employees are misaligned. Employers perceive health benefits, mental health support, and risk insurance benefits as the most important in their portfolio.

On the other hand, employees are prioritising flexible work arrangements, retirement plans/long-term finances, and support for employees’ benefits decisions.

“To truly resonate with employees and gain a competitive advantage, companies must keep their ears close to the ground and get creative and flexible in rethinking their benefits strategies,” said Audrey Tan, Head of Health & Benefits, Singapore, WTW.

“The same benefits will not resonate for everyone. Employers need to cater to different needs, whether it’s differences by gender, ethnicity, or other factors, ensuring that employees have a choice,” Tan added.