Five Factors to Consider when Designing Benefits Plans

Beyond traditional health-care plans and pensions, employees now expect a broader choice of benefits that reflect their changing needs and lifestyles. Meeting these expectations gives employers an opportunity to differentiate themselves in a competitive market for talent.

Well-structured benefit plans enable employers to reward and incentivise staff, promote loyalty, and boost engagement and productivity. They also alleviate some of the most common causes of stress amongst employees, such as health care and financial security.

What employees want

Research by Willis Towers Watson suggests that employers are increasingly aware of the need to tailor the range of benefits they offer to their employees’ needs.

In the US, for example, 92% of employers believe that voluntary benefits and services will be important to their employee value proposition over the next three to five years. This awareness is up from 73% in 2015 and 59% in 2013.

Researchers asked employees around the world to rank their top three reward preferences from a range of well-established options. Larger pay increases came top amongst respondents in all 12 countries and both age brackets (20–39 and 40+). More generous retirement benefits were in second place for respondents over the age of 40 across most of the world, as well as for 20–39-year-olds in Australia, Germany, the UK, and the US. In Brazil, Canada, China, India, and Japan, the opportunity to earn a bigger bonus came second amongst the younger group.

More generous retirement benefits were also a priority for those in their twenties and thirties, while more generous health benefits were valued by the 40+ group.

Increasingly popular non-core perks

As employers begin to offer greater customisation, they are able to respond to employee demand for additional options that support their financial wellbeing. Such security is a priority shared by employees of all ages, around the world.

These may include:

  • Identity theft protection
  • Critical illness insurance
  • Student loan repayment programmes
  • Pet insurance

Employers might wish to take the following steps when considering how to develop their benefit plans:

  • Align the benefit strategy with business objectives
  • Aim for consistency with local relevance
  • Provide core security and increase employee choice
  • Educate employees about the benefits programme
  • Deliver high-performing programmes