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Health benefits, career training and development, and risk and insurance benefits are the most important aspects employers surveyed prioritise.
In the current landscape, employers encounter a spectrum of hurdles in shaping their benefits strategy.
Particularly, as observed in the 2023 Benefits Trends Survey by WTW, more than four in five (82%) employers in Malaysia view competition for talent as the number one business issue influencing their strategy for employee benefits in 2023. In tandem, an increasing number of employers are targeting an ‘above market’ benefits position to attract top talent even amidst rising costs.
This reflects a wider sentiment shared across the region, as competition for talent tops every single market in Asia Pacific as the key issue influencing employers’ benefits strategy.
As a whole, the survey examines the future direction of an organisation’s benefits strategy and how employers are changing and adapting their benefits design, financing, administration and analytics.
At the same time, rising costs, which was not among the top four concerns in 2021, has now risen to second place in Malaysia (60%) — possibly a sign that employers are increasingly under pressure to balance their budgets and evolve benefits strategies. Although the focus on flexible working arrangements has dropped slightly from 2021, it is nevertheless a priority at third place, followed by an increased focus on inclusion and diversity.
In line with rising cost being the second biggest challenge, the ambition to improve benefits continue to compete with the increasing pressure to manage costs and optimise the value of benefits programmes. More than half of employers cited that persistence of higher inflation (54%), and a weakening economy and business environment (54%) would have a significant impact on their benefits budgets in the next two years.
Rosalind Yu, Director of Health & Benefits, Malaysia, WTW commented: "The current state of the economy in Malaysia is putting employers in a precarious position, as they balance winning the competition for talent and contending with the rising cost of services, while budgets remain tight. Despite the challenges, it is clear that employers recognise the urgency in delivering more efficient benefits programmes and remain committed to improving their portfolios."
Meanwhile, employers from the wider APAC region similarly identified the following as the top four business issues influencing their organisations’ strategies for benefits:
- competition for talent,
- rising costs,
- flexible work arrangements, and
- the focus on inclusion and diversity.
Looking further into benefits strategies, employers in Malaysia identified health benefits (69%), career training and development (62%), and risk and insurance benefits (41%) as the most important benefits in their portfolios. These priorities are also closely aligned with the broader APAC region, which saw the same top three priorities at 61%, 47% and 41% respectively.
Tackling all aspects of benefits
Looking ahead, employers in Malaysia recognise the importance of achieving ‘above market’ positions for their benefits portfolios over the next two years. While only currently 16% of employers describe their current financial wellbeing / short term finances benefits as ‘above market’ relative to their main competitors, 40% desire to reach this position in the next two years.
This was then followed by:
- mental health support (12% ‘above-market’ position currently vs. 29% desired ‘above-market’ position);
- career training and development (21% current vs 38% desired); and
- health benefits (17% current vs 34% desired).
At the same time, respondents expressed a strong desire to improve their current benefits portfolios to compete with their competitors. Particularly, close to one-third (32%) said they are looking to improve the positions of their benefits in financial wellbeing / short-term finances.
Apart from the above priority, employers are looking into improving mental health support at 26%, as well as family and caregiving support at 25%. There was also a greater emphasis on diversity, equity and inclusion (DEI), with more than half (55%) planning or considering actions to understand key issues in DEI that are affecting employees.
Finally, employers in the country are also looking at ways to maximise employee experience and engagement — indicated 60% plans or were considering providing a single digital platform where employees can access all benefits and services. Over two-fifths (43%) are also planning or considering more tools and services to help employees choose the best options when using their benefits.
Lead image: 2023 Benefits Trends Survey, WTW
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