Employers in Thailand Face Disconnect Between Cost and Perceived Value of Employee Benefits - Towers Watson

          49% of employers in Thailand spend more than 20% of payroll on benefits, and 69% believe rising benefit costs is a key challenge in delivery their benefits strategy.
          Only 12% of organisations in Thailand believe their benefits are highly valued by employees 

          Thai companies are seeing a major gap between the amount of money they spend on employee benefits and the value they get from them, according to new research by leading global professional services company Towers Watson (NASDAQ: TW). However this is not unique to Thailand and is a common finding in Asia Pacific. A total of 1,145 organisations across 20 countries in Asia Pacific participated in the survey making it the most comprehensive benefits trends survey conducted in the region.
          Findings from Towers Watson’s 2015 Asia Pacific Benefit Trends survey illustrate the challenge for employers. Benefits are increasingly seen as an integral part of the Employee Value Proposition (EVP) — a reward lever to help attract, retain and engage employees. More than three in five employers surveyed in Thailand said that improving attraction and retention (63%) and improving employee engagement (62%) are key objectives of their benefit strategies.
          At the same time, benefit costs already represent a significant percentage of payroll. Almost half (49%) of employers in Thailand said that they spend more than 20% of payroll on benefits, and almost one-in-ten (9%) spend upwards of 40% of payroll on benefits. Furthermore, 69% of employers in Thailand said that rising benefit costs was a key challenge they face in delivery their benefits strategy. 
          Worryingly, over a fifth (21%) of employers across Thailand said they didn’t know how much they are spending on benefits.
          “This apparent lack of awareness about their benefits spends suggests that employers are struggling with benefits governance, whilst juggling multiple systems, vendors and administrative platforms,” said Mark Whatley, Director, Benefits, Towers Watson, South East Asia. “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 program. A benefits program 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% of Thai employers think they are highly valued by employees. “It is worrying that almost a quarter (24%) of employers in Thailand 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, Benefits, Towers Watson, Thailand and Director, Benefits Optimisation Consulting, Towers Watson, Asia Pacific. ”It is therefore 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 Asia Pacific, 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.Similarly, perceived value of benefits increased when employee life events were handled effectively and benefits were effectively communicated.
          Introducing more flexibility into the benefits program is one way that employers are looking to address the benefits value gap. For organisations that already offer flexible benefits, the majority felt that their programs had been successful in promoting employee understanding and appreciation of benefits (67%), recognise diverse needs of workforce (66%) and improving attraction and retention (59%).
          “Flexible benefits continue to be an effective way of delivering benefits and improving their perceived value to employees,” said Chris Mayes. “Besides recognising the diverse needs of employees, offering flexible benefits necessitates regular communication to enable employees to make choices and puts values on the various benefit items included in the program. These aspects help increase the value employees attach to their benefits. In Thailand we are seeing an increase in the number of companies looking to flexible benefits to support their overall talent strategy to attract, retain and engage their employees, whilst at the same time improve the employees’ perceived value of their benefits.”