Simple & Effective - Making Your Benefits Matter GD All · Building a valued employee benefit program 3. Re-evaluating the benefit of benefits 4. ... or products in any country in

SIMPLE & EFFECTIVEMAKING YOUR BENEFITS MATTER

Sirius MaiDirector, Employee Health & BenefitsMercer Marsh Benefits

1MERCER MARSH BENEFITS

Your agenda today…

1. The story so far…

2. Building a valued employee benefit program

3. Re-evaluating the benefit of benefits

4. Making your benefits matter

5. Questions


The story so far…

Is your salary budget enough to “move the needle”on base pay and bonuses?

The tension between what the

business can afford and actual numbers

in the market.


… but the story gets scarier…Are your employees becoming less engaged and less committed?

employees are looking to leave

In China

13

Source: Mercer 2011 What’s Working Survey China based on1,000 respondents in China

of employees in China are

seriously considering leaving their employer

34%(Up from 18% in 2004)

6.5% 2011 est

unemployment rates

of women inChina are

dissatisfied with their current employment but

they are less likely to leave

47%

of Gen X inChina are dissatisfied with base

and incentive pay

65%


… and then even more scarier!

How easy is it to copy compensation?

Is your pay policy sustainable in the

long run?


The costs of providing health benefits in ChinaDo you know how much it costs?

Source: Mercer Asia Pacific Total Health and Choice in Benefits 2011 Survey Report

China

Average salary of Mercer’s client base in China is RMB8,000 per month

2% - 15% of payroll equates to between RMB160 and RMB1,200 per month at average income levels amongst Mercer clients…

…or between RMB1,920 and RMB14,400 per annum.

Source: Mercer


Is there a happy ending?Engaging employees while managing employment costs

Better value for money group medical and insurance as well as retirement benefits

Impact on productivity wellness programs and health solutions

Focused on specific employee needs flexibility and choice

Employer branding employment value versus employment price

What are the true benefits of benefits?

Do your employees recognise the true benefits of benefit? And do you know

whether your employees truly

value them?

Simple & EffectiveBuilding a valued employee benefit program


Drivers of the employee value propositionWhat do your employees in China really value?

Career Advancement

TrainingOpportunities

Base Pay

Bonus / other incentives

Working for a respectable organisation

Career Advancement


Base Pay

Supplemental retirement savings plan


Base Pay

Career Advancement




Base Pay

Career Advancement



Supplemental medical insurance coverage


Base Pay

Career Advancement



1

2

3

4

5

16 – 24 years 25 – 34 years 35 – 44 years 45 – 54 years 55 –65 years



Career Advancement


Base Pay



Career Advancement


Base Pay



Base Pay

Career Advancement




Base Pay

Career Advancement





Base Pay

Career Advancement



1

2

3

4

5




Career Advancement


Base Pay



Career Advancement


Base Pay



Base Pay

Career Advancement




Base Pay

Career Advancement





Base Pay

Career Advancement



1

2

3

4

5




Career Advancement


Base Pay



Career Advancement


Base Pay



Base Pay

Career Advancement




Base Pay

Career Advancement





Base Pay

Career Advancement



1

2

3

4

5



Building a benefits program…

Base pay Variable pay Incentives Statutory

Retirement Insured Benefits Allowances Training

Career Development Work / Life

Supplemental Benefits

Employee Engagement and Communication

Delivering Employee Value

Diff

eren

tiatio

n ac

hiev

ed

Inve

stm

ent r

equi

red


… but keeping it Simple & Effective!

• A benefits program is a success if:– Each benefit is driven

by real need / sense of value for the employee

– Each benefit includes built in cost control mechanisms, for now and in the future

Is there a fresh way to look at

talent and budget issues?

How do I balance between market competitiveness and managing

costs?

Is it time to move to a more

offensive strategy and

innovate?

But everyone I compete

with covers the basics

Simple & EffectiveRe-evaluating the effectiveness of benefits


The cost of having an outdated benefit programSenior management concern – Where is the value?

A A private company with

2,0002,000employees

across China

CCurrent benefit program was mostly focus on cashcash allowances

Too many benefit items that were miscellaneous, program was

unfocusedunfocused

Most of the benefits were belowbelow market

and peer groups

Not valuedNot valuedby employee segments

with different needs

Poor awarenessPoor awarenessof current benefits despite

considerable investment by the employerRMB 20 RMB 20

millionmillionper annum spent!


Assessing whether existing program is still relevantSenior management concern – Where are the gaps?

0%

25%

50%

75%

100%

125%

Wealth Benefits (Supplementary retirement orSupplementary housing or long-term

incentive)

Insurance-Risk Insurance

Insurance-Medical Insurance

Annual leave

Sick leave

Education Assistance

Business Travel

Cars Benefits

aily Allow ance-Others (Transportation,Meal, Mobile phone)

Others Benefits

Benchmark Client


Review and redesign of benefit programSenior management concern – How to make this an effective program?

Removed：1. Long Service Award2. Attendance Bonus for

Manager and Above3. Transportation & Meal

Allowance for top management

4. Tissue benefits

Added：1. Risk insurance2. Medical insurance3. General staff check up4. Women’s Day Benefit5. Employee Birthday Benefit6. Flexible choice for insured

benefit

ShortShort--TermTerm2012

1. Annual Leave

2. Sick Leave

3. Cars Benefits

4. Education Assistance

5. Wealth Benefits-Supplementary Housing

6. Commence implementation of Flexible Benefits program

MidMid--TermTerm2013-2014

1. Wealth benefits

2. Supplementary pension

3. Supplementary savings

MidMid--TermTerm2015-2020

Benchmark and market trends to guideguide design

Making your benefits matterEngagement, performance and costs


Employers’ perspective…

ENGAGEMENTLooking at compensation and benefits holistically

Careers Work/LifeMoneyPay BenefitsBase pay

Guaranteed ‘bonuses’

Short term incentives

Long term incentives

Allowances

Financial recognitionprograms

Deferred compensation

Retirement

Savings

Medical/Dental/Vision/Prescription drugs

Short term and Longterm disability

Accident coverage

Performance and accountability

Career opportunity and pathing

Mobility

Leadership

Experiential rewards

Talent development

Time off

Wellness Programs

Dependent care

Workplace flexibility

Non-financial and status recognition

Commuter programs

Workplace facilities and prerequisites

Employees’ perspective…

My current value My security and protection My future value My quality of life


Creating a holistic approach to compensation & benefits


COSTSMaking a business case for your benefit programs

UnderstandingNeeds

Program Design

Robust Negotiations

Ongoing Management

• Support employee communication

• Regular review meetings• Vendor management• Support you and resolve

any issues• Keeping you informed• Claims management

Annual Cycle

• Full market access• Leverage on

negotiations• Supported by analytics

Medical Expenses by Major Service Category - ALL PLANSBenefits Incurred Claim (HK$) Paid Claim (HK$) % of Total Paid Claim Usage RatioHospitalization 118,113 61,666 0.2% 52%Maternity 0 0 0.0% n/aSupplementary Major Medical 0 2,600 0.0% n/aOutpatient 202,902 186,089 0.7% 92%Annual Medical Check-up 0 0 0.0% n/aDental 0 0 0.0% n/aTotal 321,014 250,355 1 78%

Note: Data above represents claims for from Nov-2010 through Jun-2011Usage Ratio is Paid Claim over Incurred ClaimIncurred claims represents claims incurred during the specified time period which have been claimed by plan membersPaid claims represents the claims submitted and reimbursed by the medical plan

25%

0%1%

0%0%

74%

Hospitalization

Maternity

Supplementary MajorMedicalOutpatient

Annual MedicalCheck-upDental

Year on Year Demographic Change

Employees and Dependents

050

100150200250300350400

0-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65+

Age Band

Tota

l Liv

es

20112011

• Understanding your business • Understanding your goals• Identify objectives• Annual planning/ strategy

meeting

• Understand key cost drivers (claims analysis)

• Opportunities to rationalise costs• Ensure legislative compliance• Consider market trends• Benchmarking• Develop strategy and process


Make your benefits matterSimple & Effective

• Design for need, not for benchmark!

• If you don’t tell, they won’t know. If they don’t know, they won’t value!

• Less is more, making it simple for employees is difficult!


Mercer Compensation and Benefits Mobile AppDownload from the iTunes App Store and Android Play Store by searching “Mercer”…

• Reference guide to compensation and benefit programs for 49 countries.

• Compensation practices, retirement, medical, life and accident, long-term and short-term disability, car benefits and other perquisites and allowances.

• Includes statutory requirements, prevalence of employer-sponsored plans, typical plan design, overview of the overall benefits environment.

IMPORTANT NOTICE: This document does not constitute or form part of any offer or solicitation or invitation to sell by either Marsh or Mercer to provide any regulated services or products in any country in which either Marsh or Mercer has not been authorized or licensed to provide such regulated services or products. You accept this document on the understanding that it does not form the basis of any contract.The availability, nature and provider of any services or products, as described herein, and applicable terms and conditions may therefore vary in certain countries as a result of applicable legal and regulatory restrictions and requirements.Please consult your Marsh or Mercer consultants regarding any restrictions that may be applicable to the ability of Marsh or Mercer to provide regulated services or products to you in your country.

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Simple & Effective - Making Your Benefits Matter GD All · Building a valued employee benefit program 3. Re-evaluating the benefit of benefits 4. ... or products in any country in