The talent war in Hong Kong has driven employers to target an “above market” benefits position to attract top talent.
More than three-quarters of employers in Hong Kong see competition for talent as the number one business issue influencing their strategy in employee benefits in 2023, said WTW recently when releasing its 2023 Benefits Trends survey results.
The survey was conducted between March 1 and April 14, 2023, with responses from 5,233 employers across 95 markets globally, representing 22.9 million employees, according to WTW, adding that 134 employers in Hong Kong took part in the survey, representing 0.1 million employees.
The study found that concerns around competition for talent (77%) and rising cost (64%) have remained unchanged since 2021, while the cultural shift towards flexible work rose to third place as companies grapple with reforming policies in the wake of the pandemic, WTW noted.
Survey highlights: Misalignment in employee and employer expectations
- In the race to expand benefits, Hong Kong employers are prioritising provision of health benefits (82%), risk and insurance benefits (43%) and career, training and development (43%).
- However, a separate survey of employees found that they prioritise retirement plan / long-term financial incentives (38%), flexible work arrangements (38%), followed by health benefits (33%) and the support for their benefits decisions (33%).
- When considering benefits strategies, employers cite managing plan cost as the key area of focus (74%), followed by industry benchmarking to understand their benefits competitiveness (47%) and improving employee wellbeing (45%).
Hong Kong’s trend is in line with the challenges faced by most organisations in Asia Pacific, where employers are finding it complicated to retain talent while benefit and operational costs continue to rise, said Eric Lam, Head of Health & Benefits, Hong Kong and Macau, WTW.
“While the Hong Kong economy is recovering, global issues will continue to exert persistent pressure on Hong Kong’s employers,” Lam pointed out.
Additionally, the post-pandemic needs of employees are changing and demands for comprehensive benefit provisions continue to grow, he added.
To remain competitive in a talent-driven service economy, employers must keep their benefits packages in line with peers — to the benefit of employees, he advised
Elevating all aspects of benefits to win the talent war in Hong Kong
While the results of the Hong Kong survey mirror the views of employers from the wider Asia Pacific region, respondents identified a need to improve all areas of their benefits strategies over the next two years to elevate employee health and wellbeing.
Some of the key areas include the followings.
- Aligning benefits portfolios with business and talent goals: APAC employers have a strong desire to improve their current benefits portfolios to compete with their competitors.
- Close to one-third (31%) said they are looking to improve the positions of their benefits in financial wellbeing / short-term finances, followed by mental health support at 28%, and retirement plan / long-term finances at 27%.
- Employers are also putting greater emphasis on diversity, equity and inclusion (DEI), with more than half (57%) planning or considering conducting a review of their inclusion and diversity benefits.
- Managing rising cost: Employers are taking more aggressive actions to manage the budgets of their benefits programmes, with 71% of APAC employers planning to improve contract terms with their vendors and 48% looking at bundling services into one package from a single vendor.
- More than half (56%) are also looking to secure additional funding for their benefits programmes, 44% plan to expand the use of risk financing arrangements and 37% plan to increase the employee share of cost.
- Maximising employee experience and engagement: More than half (52%) of APAC employers are planning or considering to provide a single digital platform where employees can access all benefits and services.
- Close to half (48%) are also planning or considering more tools and services to help employees choose the best options when using their benefits.
While survey results shows that employers recognise the urgency in delivering more efficient benefits programmes, the challenge now is to develop a truly equitable approach that not only tailors to the individual needs of the workforce, but also ensures that the value of their investments is optimised to become most cost-effective, said Cedric Luah, Managing Director and Head of Health & Benefits, International, WTW.
“Companies that can achieve this balance will differentiate themselves and gain a strong advantage against their competitors in the talent war in Hong Kong,” Luah noted.
