In the current workforce landscape where talent dominates the hiring process, employers must consistently review their employee benefits package for the company to stand out to potential employees.
“With the rising costs of healthcare services observed globally, including Singapore, companies that use a traditional medical benefit model are finding it increasingly difficult to address both their employee’s medical needs and the cost-effectiveness of providing these benefits,” commented Hadiyanto Wibawa, co-founder & country manager for Singapore HQ, Mednefits.
“The adoption of a flexible benefits model, however, could overcome the conundrum by allowing employees to choose from a pool of preferred benefits set by the employer and build personalised and customisable benefits packages, satisfying both employers and employees.” Hadiyanto Wibawa
2022 employee benefits trends
The importance of investing in the right employee benefits model
- The top four perceived outcomes from investing in employee benefits include:
- Greater employee engagement (52%)
- Compliance with medical coverage (49%)
- Greater ability to attract and retain talent (49%)
- An added cost to the organisation (28%)
- A difference in perception of employee benefits between SMEs and MNCs:
- Employee engagement (49% vs 60%)
- Compliance with medical coverage (49% vs 48%)
- Greater ability to attract and retain talent (47% vs 56%)
- An added cost to the organisation (30% vs 20%)
Despite the common understanding of the importance of providing employee benefits, almost one in three companies view having these benefits as an additional cost rather than an investment for the organisation.
When investigating the differences in perspective between SMEs and MNCs, SMEs (30%) are more inclined to state that employee benefits are an added cost as compared to the 20% of MNCs.
This is due to SMEs having limited resources where they face the challenge of having to allocate most of the limited financial resources for growth rather than employee benefits, and the lack of manpower to oversee the usage and implementation of a well-structured employee benefits model.
It is hence crucial to find a solution that would address both the demands of employees and the employer’s financial ability.
Employee medical benefits in Singapore
- The most common method of providing medical benefits in Singapore is through engaging with insurance providers for inpatient and outpatient medical benefits (55%) while other companies prefer to manually self-manage via company reimbursement (48%), engaging a third-party administrator (34%) or any combination of the three services.
- The top 3 types of medical benefits provided, and the average amount spent:
- Hospitalisation / Inpatient care (69%) | US$900
- GP / Outpatient care (71%) | US$371
- Health Screening (56%) | US$430
- The 3 least common types of medical benefits provided, and the average amount spent:
- Traditional Chinese Medicine (17%) | US$286
- Wellness (incl. Yoga, mental health, etc) (19%) | US$616
- Optical (20%) | US$423
The report highlights that despite a significant number of employees requiring optical benefits in Singapore, it does not receive as much priority with only 20% of the companies providing optical benefits to their employees.
This is relatively low when compared to companies providing dental benefits (51%). However, a promising finding showed that more companies are placing greater emphasis on providing wellness benefits in Singapore (19%) as compared to previous years. That is, more than one in three companies are willing to pay more than US$2,000 for wellness in Singapore.
A preferred method for providing medical benefits
- Most companies (34%) identify designing a flexible benefits plan that is customised to each employee’s needs as the biggest challenge
- Benefits of implementing a flexible benefits model:
- Meeting each employee's unique needs
- Helps the company stand out amongst jobseekers
- Gives the company better financial control when providing medical benefits by eliminating the issue of under or over-utilisation of benefits
Though companies are willing to implement flexible benefits (58%), there are still several barriers which impede the adoption. One of the most common challenges faced is the difficulty in crafting a plan that is customisable to each employee’s need.
Furthermore, HR decision-makers within companies highlighted the top 3 concerns of implementing the model as 1) unsure if employees would prefer the flexible model (71%), 2) friction within the company when making changes (66%), and 3) are unsure of the available tools for a smooth implementation (62%).
Tips for reducing medical costs in Singapore
- 28% of companies are unsure of how to reduce the cost of healthcare spending
- 35% are prioritising understanding employee’s needs to provide more attractive benefits
- Preferred ways of reducing healthcare spending in Singapore:
- Flexible benefits spending account (58%)
- Digital benefits platform (36%)
- Co-payment (41%)
Through the understanding of employee medical needs and the tips available to reduce medical costs, organisations would not have to compromise on their goal to retain, attract and engage with talent due to insufficient financial resources.
With 93% of companies in Singapore actively seeking ways to reduce healthcare spending, 28% of them are still unaware on how to reduce costs.
