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Maximizing Employee Benefits
Prioritize resources to increase benefit competitiveness and value With the year-end compensation process coming to an end, staff attraction and retention becomes once again on the top of the priority list. However, there has been the on-going dilemma of how to better manage compensation and benefits costs, and prioritize resources so as to maximize the value propositions for staff attraction and retention. Granular market information is undoubtedly indispensable to understand the current and emerging benefits trends. It lays a strong foundation for positioning various terms and conditions of employment. According to Pretium Benefits and Employment Terms & Conditions Study for Hong Kong, Medical, Life & Disability Insurance, Annual Leave, Employee Education and Medical Checkup are the most prevalent benefits items among the key financial institutions. The competitiveness of these benefits items, and how to structure them, would become the baseline within the total reward package for employee attraction and retention. |
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Who is your Target Comparator Group?
Ensuring the competitiveness of the most prevalent benefits are tougher than imagine. How should a firm be benchmarked? Some companies will select a group of companies that are of similar size and structure and for whom they compete with each other for business and talent as the benchmark groups. The target comparators used for benchmarking will have a significant impact on the target benefits positioning and subsequent allocation of benefit resources.
Due to difference in scale and benefit philosophies among firms, how firms spend their benefits dollars and differentiate benefit levels across grade and/or years of service could be quite diverse.
From the table below, for example, some Chinese firms place more emphasis on supplementary retirement benefits and provide 10% employer contribution for all employees, whereas international firms differentiate employer contribution (from 5% to 10%) by years of service. In contrast, international firms tend to be more generous in dependent coverage for medical insurance due to cultural difference. With growing awareness of work life balance and continuous professional development, international firms also tend to provide better benefits in terms of annual leave and support on professional membership. However, Chinese firms prefer allocating benefit resources to festival allowance by giving “hong bao” (red packet) during Chinese festivals and employees’ birthday or wedding.
Ensuring the competitiveness of the most prevalent benefits are tougher than imagine. How should a firm be benchmarked? Some companies will select a group of companies that are of similar size and structure and for whom they compete with each other for business and talent as the benchmark groups. The target comparators used for benchmarking will have a significant impact on the target benefits positioning and subsequent allocation of benefit resources.
Due to difference in scale and benefit philosophies among firms, how firms spend their benefits dollars and differentiate benefit levels across grade and/or years of service could be quite diverse.
From the table below, for example, some Chinese firms place more emphasis on supplementary retirement benefits and provide 10% employer contribution for all employees, whereas international firms differentiate employer contribution (from 5% to 10%) by years of service. In contrast, international firms tend to be more generous in dependent coverage for medical insurance due to cultural difference. With growing awareness of work life balance and continuous professional development, international firms also tend to provide better benefits in terms of annual leave and support on professional membership. However, Chinese firms prefer allocating benefit resources to festival allowance by giving “hong bao” (red packet) during Chinese festivals and employees’ birthday or wedding.
Case Study
In order to cater for business expansion and HR transformations, the Client decided to review and strengthen benefits plan and employment conditions. Pretium was appointed to provide market practice on benefits provisions and employment conditions to ensure market alignment and maximize the value of benefits package.
To be in line with the expansion strategy, the Client required benefits to be benchmarked with two comparator groups that included Chinese firms and international firms to determine benefits competitiveness and positioning for the medium-term and long-term. The table below presents a snapshot of the competitiveness of Client’s benefits items against the two comparator groups – Chinese firms and International firms in HK:
In order to cater for business expansion and HR transformations, the Client decided to review and strengthen benefits plan and employment conditions. Pretium was appointed to provide market practice on benefits provisions and employment conditions to ensure market alignment and maximize the value of benefits package.
To be in line with the expansion strategy, the Client required benefits to be benchmarked with two comparator groups that included Chinese firms and international firms to determine benefits competitiveness and positioning for the medium-term and long-term. The table below presents a snapshot of the competitiveness of Client’s benefits items against the two comparator groups – Chinese firms and International firms in HK:
Pretium Benefits & Employment Conditions Study Report 2016The above comparison indicates that the Client’s medical insurance and supplementary retirement benefits were behind when compared to both Chinese and International firms. These findings provided the impetus for potential benefits upgrade and/or potential reshuffling of benefit resources. The resulting changes also took into consideration of how to balance against cost effectiveness and employees’ perception on the value of various benefits items.
About Pretium Hong Kong Benefits & Employment Terms & Conditions Study
Pretium Hong Kong Benefits & Employment Terms & Conditions Study provides creditable benchmarking data from international and Chinese financial institutions, which include banks, asset management firms, private equity firms, securities firms, to understand the current and emerging benefits trends and optimize various terms and conditions of employment for HR planning. This will help your firm strategically balance the cost and employee value of benefits for better talent attraction/retention.
Please click here to learn more about our benefit study.
About Pretium Hong Kong Benefits & Employment Terms & Conditions Study
Pretium Hong Kong Benefits & Employment Terms & Conditions Study provides creditable benchmarking data from international and Chinese financial institutions, which include banks, asset management firms, private equity firms, securities firms, to understand the current and emerging benefits trends and optimize various terms and conditions of employment for HR planning. This will help your firm strategically balance the cost and employee value of benefits for better talent attraction/retention.
Please click here to learn more about our benefit study.