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Employee demand makes customized benefits essential for employers
Posted on Nov 09, 2017 by Jessica Lindeman
Did you know? The proportion of UAE employees willing to pay for customized employee benefits has risen dramatically. In 2017, 62 percent of employees said they would agree to pay for benefits customization compared to 43 percent in 2014, according to a 2017 Employee Benefit Trends Study (EBTS) by MetLife. This illuminates a potential opportunity for employers to foster staff engagement, attract and retain talent, as well as drive up productivity through a voluntary benefits program.
A voluntary benefits plan provides optional or additional benefits offered by an employer, but are partially or fully paid for by an employee. Here, we look at what the EBTS has to say about changing workforce trends, and why it is important for employers to bridge the gap between employee expectations and organizational needs.
Changing workforce trends
According to the EBTS, 56 percent of employers cite “keeping up with industry trends” as a key employee benefits challenge. So, what are those trends?
Mandatory health insurance has changed perceptions
By the extended March 2017 deadline, over 99 percent of employers have complied with Dubai’s mandatory workplace health cover requirements. The introduction of mandatory health insurance has highlighted the value of employee benefits, opening opportunities for employers to further differentiate their offerings to new and current staff. And that’s not just in health insurance benefits but also across a wider range of benefits like physical and mental wellness, culture, flexible working arrangements, etc.
For many UAE employers, the talent they need to attract and retain now includes millennials, many of whom are entering into managerial/senior positions. Many millennials approach employee benefits and perks with different expectations than previous generations. These expectations are driving demand for easier access to care, and more tailored benefits delivered through digital channels like e-portals. It’s no wonder that providing more tailored and flexible benefits to cater to the changing and varied needs of the workforce is becoming more attractive.
Near-universal acceptance that employee wellness creates positive outcomes
The EBTS further revealed that three-quarters of employers accept they have responsibility for their employees’ health and wellbeing. The changes seen in companies implementing successful wellness programs include:
- A 66 percent increase in employee satisfaction
- A 66 percent increase in productivity
A growing proportion of employees believe that employers should make a contribution beyond salary and mandatory provisions. In 2014, 39 percent of employees cite benefits as an important reason for choosing an employer, which jumped to 61 percent by 2017. And the “wellness train” shows no sign of slowing. 73 percent of employers say they believe their responsibility for employees’ health and wellbeing will increase in the next 3 to 5 years, and 92 percent of employees believe wellness programs have a positive impact on their health.
Bridging the gap between employee and employer needs
As mentioned in the introductory paragraph, employees are increasingly demanding customized benefits. Changing demographics pose a growing concern to employers. For example, an employee benefits package ideally suited to a middle-aged senior manager will likely gain less traction with a millennial architect. 82 percent of employers in 2017 are prioritizing their need to offer a wider range of voluntary benefits - with the same proportion looking for greater customization to address diverse employee needs.
The majority of UAE employers (72 percent) in 2017 think voluntary benefits are a cost-effective way of ensuring that employees’ diverse needs are met. The important question here is how to ensure that the optional benefits employers are offering are the type of benefits that actually appeal to their employees. To address this dilemma, the EBTS looked to uncover what benefits are the most sought after by UAE employees (including whether they would be happy paying part of the benefits, or all of it). Here’s what they found:
Source: Employee Benefit Trends Study (2017)
As can be seen in the chart above, demand for benefits that require the employee to bear 100 percent of its cost did not fall much when compared to the demand for benefits that require employees to pay part of its cost. If the customized employee benefits are designed to cut costs for the employer, as well as address employees’ concerns and needs, there is double the reason for offering benefits selections that the workforce will value.
Recommendations for employers: how to build a successful employee benefits program
Based on the EBTS findings, MetLife developed a number of recommendations for employers in the UAE. Key among these recommendations is catering to the diversifying needs of the workforce through voluntary benefits. The study found that there is growing interest in customized offerings, and this is fortunately being matched with a growing willingness by employees to fund their benefits to meet their unique needs and circumstances.
Providing the most optimal employee benefits solutions to your workforce
While competitive salaries remain a great way to attract and retain key employees, employers can move beyond this transactional relationship and offer customized benefits that center around increasingly diversified workforce needs - both increasing employee satisfaction and optimizing performance.
As every organization and every workforce is different, there’s no such thing as a one-size-fits-all benefits strategy. This is why many employers find it hard to devise and implement the most optimal offerings. Talking to an employee benefits specialist, like UAE Medical Insurance, can help. With years of experience delivering health insurance, employee benefits, and a range of business insurance solutions, our expert team of advisors can put together an attractive plan for companies of any size, in any industry.