H E A L T H W E A L T H C A R E E R 2 0 1 5 B E N E F I T S W E B I N A R A S I A P A C I F I C H A R R I S O N TA N S I N G A P O R E FEBRUARY 11 2015 Presenter Title London
AGENDA TOPICS 1 Demographics Snapshot Survey Benefits Expenditure Benefits Review Frequency 2 Benefits: Attraction, Motivation & Retention Hot Topics For Benefits Health Benefits: Cost Containment Legislative Updates MERCER 2015 2
H E A L T H W E A L T H C A R E E R Snapshot Survey Demographics, Benefit Expenditure & Frequency of Benefits Review FEBRUARY 11 2015 Presenter Title London
Employee Size Snapshot Survey Demographics Participants by Country Participants by Industry Professional & Other Services, 3% BPO, 2% Chemical, 9% Engineering & construction, 4% Participants by Employee Size 1-99 500-1500 100-499 Technology, 15% Pharmaceutical/ Life, 8% Others, 15% Oil & gas, 5% Financial services, 7% FMCG and Retail, 12% Logistics & distribution, 6% >1500 Manufacturing, 12% 0 100 200 300 400 No. of companies MERCER 2015 4
Snapshot Survey Benefits Expenditure 10 Total Benefits Expenditure 9 8 7 6 5 4 3 2 1 0 to1 11 to 2 21 to 3 31 to 4 More than 4 Source: 2015 Mercer Benefits APAC poll survey MERCER 2015 5
Snapshot Survey Benefits Review Frequency Frequency of Benefits Review Every 3 years or more 33% Every 1 to 2 years 67% Source: 2015 Mercer Benefits APAC poll survey MERCER 2015 6
H E A L T H W E A L T H C A R E E R Hot Topics For Benefits Benefits: Attraction, Motivation & Retention Health Benefits: Cost Containment Legislative Updates FEBRUARY 11 2015 Presenter Title London
The Role of Benefits Strongly Disagree Attracting Talent Strongly Agree 4% Strongly Disagree 3% 16% 55% 22% Retaining Talent Strongly Agree 4% 3% 17% 54% 22% Strongly Disagree Motivating Talent Strongly Agree 4% 7% 27% 47% 16% Source: 2015 Mercer Benefits APAC poll survey MERCER 2015 8
Benefits As an Attraction Tool MERCER 2015 9
Benefits as an Attraction Tool Trendy Benefits 4 35% 36% 36% 2014 2015 3 25% 25% 24% 24% 23% 26% 28% 2 15% 13% 12% 18% 2 15% 17% 1 5% 9% 8% 5% 5% 5% 4% 4% 4% 5% 4% 6% 1% Gym Fully Stocked Pantry Game Rooms Nap Room Free massages Concierge Services Access to Social Networks No Dress Code Allow Employees to BYOD Karaoke Sessions Overseas Incentive Trip Innovation Days Unlimited Annual Leave Facilities and Services Employee Welfare Rewards Productivity Source: 2015 Mercer Benefits APAC poll survey MERCER 2015 10
Benefits As a Motivation Tool MERCER 2015 11
Benefits as a Motivation Tool Performance-based Benefits 2 of organizations offer benefits based on performance in some form or another Allowances Training Flexible Working Arrangements 1 st 2 nd 3 rd Source: 2015 Mercer Benefits APAC poll survey MERCER 2015 12
Benefits as a Motivation Tool Performance-based Benefits Training (Singapore) 10 8 6 4 54% 54% 57% 55% 64% 5 48% 42% 38% 66% 68% 63% 64% 57% 64% 2 All Industries Chemical Consumer High-Tech Pharma/Life Master's/PHD Bachelor Diploma/Certificate Subsidy for courses Program Ceiling (SGD) All Industries Chemical Consumer High-Tech Pharma/Life Master s/phd degree 10,000 20,000 10,000 8,000 10,000 Bachelor s Degree 9,700 20,000 15,000 7,200 10,000 Diploma/Certificate courses 7,500 20,000 15,000 7,400 10,000 MERCER 2015 Source: 2015 Mercer Benefits Monitor data 13
Benefits as a Motivation Tool Performance-based Benefits Training (Indonesia) 10 8 6 4 33% 46% 49% 41% 2 21% 17% 17% 21% 21% 22% 16% 14% All Industries Chemical Consumer High-Tech Master's/PHD Bachelor Diploma/Certificate Subsidy for courses Program Ceiling (RUP, 000) All Industries Chemical Consumer High-Tech Master s/phd degree 65,100 65,000 8 of program fees 54,400 Bachelor s Degree 50,000 60,000 46,700 54,400 Diploma/Certificate courses 44,400 36,700 10 of program fees 46,000 MERCER 2015 Source: 2015 Mercer Benefits Monitor data 14
Benefits as a Motivation Tool Performance-based Benefits Training (China) 10 8 6 4 2 34% 24% 37% 45% 29% 44% 13% 12% 38% 64% 45% 6 21% 8% 27% All Industries Chemical Consumer High-Tech Pharma/Life Master's/PHD Bachelor Diploma/Certificate Subsidy for courses Program Ceiling (RMB) All Industries Chemical Consumer High-Tech Pharma/ Life Master s/phd degree 34,525 25,000 75% of program fees 34,800 30,000 Bachelor s Degree 30,712 8 of program fees 75% of program fees 32,000 * Diploma/Certificate courses 35,000 25,000 5 of program fees 30,400 30,000 MERCER 2015 Source: 2015 Mercer Benefits Monitor data 15
Benefits As a Retention Tool MERCER 2015 16
Benefits as a Retention Tool Retention Schemes 54% of organizations have retention schemes Yes No 46% 54% Main Reasons for such schemes 47% 3% 49% Roles critical to business success High performers Others Other reasons Promote loyalty Reduce attrition rates To retain employees on specific projects Value longevity of service/tenure Prevent knowledge drain Maintain overall employee satisfaction Source: 2015 Mercer Benefits APAC poll survey MERCER 2015 17
Benefits as a Retention Tool Top retention benefit that has the highest impact Flexible Working Arrangements Allowances Supplementary Retirement Benefit Source: 2015 Mercer Benefits APAC poll survey MERCER 2015 18
Benefits as a Retention Tool Flexible Working Arrangements (Australia) 10 8 6 75% 77% 10 5 86% 86% 73% 65% 91% 87% 4 2 21% 25% 27% 12% 13% All Industries Chemical Consumer High-Tech Pharma/Life Telecommuting Flexi Time Compressed Work Week Telecommuting benefits (% of companies) All Industries Chemical Consumer High-Tech Pharma/Life Subsidized phone bills 7% 25% 26% 8% 24% Subsidized Internet access 26% 25% 16% 37% 43% Provision of laptop 88% 75% 74% 95% 10 Provision of mobile phone 31% 5 32% 26% 24% MERCER 2015 Source: 2015 Mercer Benefits Monitor data 19
Benefits as a Retention Tool Flexible Working Arrangements (Singapore) 10 8 77% 6 4 2 32% 48% 32% 6% 9% 5% Telecommuting benefits (% of companies) All Industries Chemical Consumer High-Tech 27% 61% 52% 5 Pharma/Life Subsidized phone bills 4% 2% 9% 5% Subsidized Internet access 3% 3% 7% Provision of laptop 23% 5% 23% 41% 32% Provision of mobile phone 8% 5% 6% 9% 9% 38% 2% 5% 5% All Industries Chemical Consumer High-Tech Pharma/Life Telecommuting Flexi Time Compressed Work Week MERCER 2015 Source: 2015 Mercer Benefits Monitor data 20
Benefits as a Retention Tool Supplementary Retirement Benefit (Japan) 10 8 88% 9 94% 88% 8 6 4 2 All Industries Chemical Consumer High-Tech Pharma/Life Supplementary Retirement Plan Type of Supplementary Retirement Plan Offered (% of companies) All Industries Chemical Consumer High-Tech Retirement Allowance Plan (Internal Funding) Pharma/Life 4 5 34% 43% 1 Employees' Pension Fund 11% 2 6% Defined Benefit Pension Plan 34% 4 57% 35% 4 Defined Contribution Pension Plan 43% 4 43% 49% 7 Others 11% 9% 14% 1 MERCER 2015 Source: 2015 Mercer Benefits Monitor data 21
Benefits as a Retention Tool Retention benefit that has the 2 nd highest impact Car Benefits Allowances Flexible Working Arrangements Supplementary Housing Benefits Supplementary Medical Benefits Supplementary Retirement Benefits Source: 2015 Mercer Benefits APAC poll survey MERCER 2015 22
Benefits as a Retention Tool Car Benefits Indonesia ranks among the top 3 APAC countries in terms of car benefit prevalence. Prevalence of Car Benefit (All Industries) Countries Sales Non-Sales South Korea 89% 79% Indonesia 8 78% Pakistan 77% 9 Malaysia 79% 65% Thailand 78% 75% Vietnam 75% 4 Singapore 7 56% Philippines 63% 55% Hong Kong 62% 26% India 6 55% China Beijing 46% 6 Taiwan 45% 51% Japan 36% 16% MERCER 2015 Source: 2015 Mercer Benefits Monitor data 23
Benefits as a Retention Tool Car Benefits (Indonesia) 10 Provision of Company Car (Non-Sales) 10 Provision of Company Car (Sales) 8 6 58% 63% 48% 6 67% 65% 8 6 48% 5 66% 69% 4 37% 26% 4 36% 32% 3 33% 2 All Industries Chemical Consumer High-Tech Pharma/Life 9% 2 All Industries Chemical Consumer High-Tech Pharma/Life 5% 6% Company Car (Top Mgmt) Company Car (Mgmt) Company Car (Top Mgmt) Company Car (Mgmt) Company Leased Car (Non-Sales) Industry (IDR, 000) Top Management Management Chemical 12,440 8,250 High-Tech * * Consumer 12,250 9,000 Pharma/Life 11,750 7,900 All Industries 12,075 8,000 Company Leased Car (Sales) Industry (IDR, 000) Top Management Management Chemical 12,500 6,750 High-Tech * * Consumer 9,000 7,700 Pharma/Life 11,700 7,875 All Industries 11,765 7,125 MERCER 2015 Source: 2015 Mercer Benefits Monitor data 24
Benefits as a Retention Tool Car Benefits (South Korea) Provision of Company Car (Non-Sales) Provision of Company Car (Sales) 10 8 75% 88% 86% 95% 10 8 88% 76% 81% 6 4 27% 32% 45% 39% 6 4 57% 28% 45% 5 38% 52% 2 18% 2 All Industries Chemical Consumer High-Tech Pharma/Life 2% All Industries Chemical Consumer High-Tech Pharma/Life 4% Company Car (Top Mgmt) Company Car (Mgmt) Company Car (Top Mgmt) Company Car (Mgmt) Company Leased Car (Non-Sales) Industry (KRW, 000) Top Management Management Chemical 1,260 900 High-Tech 1,838 * Consumer 2,156 1,500 Pharma/Life 1,200 730 All Industries 1,520 1,000 Company Leased Car (Sales) Industry (KRW, 000) Top Management Management Chemical 1,200 1,150 High-Tech 1,500 * Consumer 1,025 1,150 Pharma/Life 970 695 All Industries 1,140 730 MERCER 2015 Source: 2015 Mercer Benefits Monitor data 25
Benefits as a Retention Tool Car Benefits (Malaysia) 10 Provision of Car Allowance (Non-Sales) 10 Provision of Car Allowance (Sales) 8 6 4 59% 45% 7 62% 59% 37% 8 6 4 34% 54% 45% 76% 38% 63% 2 2 All Industries Consumer High-Tech All Industries Consumer High-Tech Car Allowance (Top Mgmt) Car Allowance (Mgmt) Car Allowance (Top Mgmt) Car Allowance (Mgmt) Industry (MYR) Head of Organization Car allowance (Non-Sales) Function Heads Senior Management Management High-Tech 3,100 3,000 2,000 1,500 Consumer 4,000 4,300 2,200 1,285 All Industries 3,500 3,000 2,000 1,135 Car allowance (Sales) Industry Head of Senior Sales Sales Sales (MYR) sales Management Management Professional High-Tech 1,600 1,500 1,500 1,100 Consumer 4,000 2,200 1,500 1,000 All Industries 3,000 1,800 1,500 1,000 MERCER 2015 Source: 2015 Mercer Benefits Monitor data 26
Healthcare/Medical Benefit Cost containment measures to mitigate increasing medical costs Implementing co-payment and front end deductibles 29% 23% Reducing premium costs through pooling and group schemes 35% 2015 2014 39% Provision of healthy lifestyle benefits and wellness programmes 45% 42% Implementing cap and limits on benefits spend 53% 58% MERCER 2015 27
Healthcare/Medical Benefit Cost containment measures Co-payment for Hospitalization Benefit In 2015, premium and claims co-payment remains low. All Industries 13% 19% 3% 6% 7% 2% 1 Hong Kong Singapore Thailand Taiwan Consumer 15% 14% 2% 6% 2% Hong Kong Singapore Thailand Taiwan MERCER 2015 Source: 2015 Mercer Benefits Monitor data 28
Healthcare/Medical Benefit Cost containment measures Co-payment for Hospitalization Benefit In 2015, premium and claims co-payment remains low. Chemical 29% 14% 23% 29% 21% Hong Kong Singapore Thailand Taiwan Pharma/Life 32% Hong Kong Singapore Thailand Taiwan MERCER 2015 Source: 2015 Mercer Benefits Monitor data 29
Healthcare/Medical Benefit Cost containment measures Caps/Limits (China) 10 8 92% 93% 96% 96% 87% 89% 79% 71% 10 68% 6 4 2 All Industries Chemical Consumer High-Tech Pharma/Life Annual Limit (RMB) Reimbursement Rate: Outpatient Reimbursement Rate: Hospitalization Maximum Entitlement (Outpatient + Hospitalization) Supplementary Medical Insurance (employee) All Industries Employee Chemical Consumer High- Tech Pharma/ Life 10 10 9 10 95% 10 10 10 10 10 20,000 20,000 20,000 20,000 20,000 Supplementary Medical Insurance (dependent) Annual Limit (RMB) Reimbursement Rate: Outpatient Reimbursement Rate: Hospitalization Maximum Entitlement (Outpatient + Hospitalization) All Industries Dependent Chemical Consumer High- Tech Pharma/ Life 5 5 5 5 5 5 5 5 5 5 20,000 20,000 20,000 20,000 20,000 MERCER 2015 Source: 2015 Mercer Benefits Monitor data 30
Healthcare/Medical Benefit Cost containment measures Caps/Limits (India) 10 8 6 4 88% 53% 82% 45% 91% 61% 8 4 2 All Industries Consumer High-Tech Pharma/Life Family Floater Corporate Floater Group Mediclaim Insurance (Hospitalization + maternity benefits) Annual Limit (INR) All Industries Consumer High-Tech Pharma/Life Family Floater 300,000 300,000 500,000 350,000 Corporate Floater on hospitalization cover 1,500,000 1,000,000 2,500,000 1,500,000 MERCER 2015 Source: 2015 Mercer Benefits Monitor data 31
10 Healthcare/Medical Benefit Cost containment measures Caps/Limits (Indonesia) 8 6 4 2 98% 10 93% 95% 84% 10 10 92% 92% All Industries Chemical Consumer High-Tech Pharma/Life Outpatient (employee) Outpatient (dependent) 10 8 6 4 2 98% 10 10 10 93% 96% 95% 82% All Industries Hospitalization (employee) 95% 89% Chemical Consumer High-Tech Pharma/Life Hospitalization (dependent) Annual Limit (IDR) Individual ( 000) Dependent ( 000) Family Limit ( 000) All Industries Outpatient Benefits Chemical Consumer High- Tech Pharma/ Life 5,500 4,200 4,800 7,000 4,960 5,500 4,200 4,250 6,500 4,900 9,000 10,200 7,000 12,000 10,500 Employee (IDR) All Industries Hospitalization Benefits Chemical Consumer High-Tech Pharma/ Life Room & Board 500,000 500,000 500,000 750,000 425,000 Max number of days Dependent (IDR) 180 105 180 120 270 All Industries Chemical Consumer High-Tech Pharma/ Life Room & Board 500,000 500,000 500,000 700,000 425,000 Max number of days 180 120 365 120 270 MERCER 2015 Source: 2015 Mercer Benefits Monitor data 32
10 Healthcare/Medical Benefit Cost containment measures Caps/Limits (Singapore) 8 6 4 99% 10 97% 10 10 93% 64% 55% 36% 77% 10 8 6 4 98% 10 10 10 95% 10 65% 59% 42% 64% 2 2 All Industries Chemical Consumer High-Tech Pharma/Life Outpatient (employee) Outpatient (dependent) All Industries Chemical Consumer High-Tech Pharma/Life Hospitalization (employee) Hospitalization (dependent) Outpatient Benefits Hospitalization Benefits Annual Limit (SGD) All Industries Chemical Consumer High- Tech Pharma/ Life Employee/ Dependent (SGD) All Industries Chemical Consumer High-Tech Pharma/ Life Individual 1,500 2,900 925 1,363 850 Room & Board 295 280 270 310 280 Dependent 750 Not common to provide on this basis Not common to provide on this basis 1,000 Not common to provide on this basis Max number of days 120 120 120 120 120 Family Limit 2,000 1,165 2,590 2,500 1,500 MERCER 2015 Source: 2015 Mercer Benefits Monitor data 33
Legislative Update Spotlight Countries: Hong Kong Paternity Leave Summary Employment Ordinance was amended to introduce 3 days paid paternity leave. New provision took effect from 27 February 2015. Paid Paternity Leave As of 2015, how many paid paternity leave days are you currently providing? 15% 3 days > 3 days 85% Source: 2015 Mercer Benefits APAC poll survey MERCER 2015 34
Legislative Update Spotlight Countries: Japan Stress Check Test Summary Stress check test (medical examinations) is mandatory for companies with 50 or more employees. Face-to-face consultations with physician must be provided upon request. New provision will take effect from 1 December 2015. Some insurers have begun to provide supplemental stress check services for companies who purchase their insurance programs. Mental Health Schemes Which mental health scheme is introduced in your company? Others 9% Seminar or training programs for employees 9% 14% 25% Programs for employees who return from work suspension due to mental illness Counselling Service Stress Check Test 42% 1 2 3 4 5 Types of Schemes Source: 2015 Mercer Benefits APAC poll survey MERCER 2015 35
Legislative Update Spotlight Countries: Japan Law for Measures to Raising Next Generation Summary The Act on Advancement to Support Raising the Next Generation of Children aims to support child rearing in light of the falling birthrate. The act, introduced in 2003, was set to expire on 31 Mar 2015 but is recently extended to 31 Mar 2025. It applies to employers with more than 100 employees, requiring them to file an action plan with the Labor Bureau that includes the steps that employers will take to support parents and children. Employers that receive formal recognition on their programs are eligible for tax benefits and may use a "kitemark" logo on their products & advertisements. MERCER 2015 36
Legislative Update Spotlight Countries: Japan 51% of organizations reported Action Plans based on the Law for Measures to Support the Development of the Next Generation. 7 65% 6 5 53% 48% 4 3 2 1 7% 22% Extension of child care leave period (supplementary) 14% 29% 29% Working at home 1% Re-hiring after retirement 7% Flexi time 9% Shorter work hours 6% Paid childbirth leave for father 8% Day nursery operation 7% 29% Subsidy for babysitter and day nursery 15% 34% Promotion of child care leave for both genders 11% 12% Other Plan designed Plan implemented MERCER 2015 Source: 2015 Mercer Benefits Monitor data 37
What do you do with all these information? The Ideal Process Communication and buy-in from global and local management Inventory of current practices Analysis of current position* Develop benefits strategy Prioritize change agenda Develop implementation plans *Analysis: The four perspectives (Re)-Design Plans Aligned to Strategy Employer Employee External Costs Business analysis, trends and themes Executive interviews & surveys Workforce profile and projections Employee surveys Preference analysis Engagement data & analysis Communication audit Competitive positioning Emerging trends Environmental developments Projected changes in labour markets Cost trends Cost & business performance projections Cost savings opportunities Risk management Delivery Communication Administration Financing Measure and Manage MERCER 2015 38
What do you do with all these information? The First Step Is To Know Where You Stand Prevalence comparison Considers: Trends, Statistics Plan design Median and quartile comparison Prevalence Advantages: See how your individual benefits compare to the market Justify decisions about changes in plan design Value-based comparison Considers: Plan design only An apples-to-apples comparison of benefits plans Advantages: Effectively compare benefits that have different plan designs Justify decisions about changes in plans design for one benefit or your benefits offering as a whole Identify gaps in your benefits plans for your different employee groups Benefits Benchmarking Benefits Analysis Reports Benefits Valuation Analysis MERCER 2015 39
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