Companies adopting more flexible and individualised benefits

30 November 2020 Consultancy.com.au 4 min. read

In its latest Australian Benefits Review, Mercer reveals how the Covid-19 crisis is serving as a catalyst for the personalisation of employee benefits in the Australian business environment. 

Mercer’s annual compilation of employee benefit data is the largest of its kind in Australia – this year drawing responses from 370 businesses across several sectors. The data was compiled during the Covid-19 outbreak and lockdown, shedding light on how businesses are adapting their compensation & benefits to the new normal.

Whether it was the transition to virtual working or the emergency localisation of supply chains – flexibility was the need of the hour in the wake of the crisis. According to Principal Consultant and General Markets Product Lead at Mercer Jessica Balcombe, this flexibility extended to employee benefits as well.

Companies are adopting more flexible and individualised benefits

“The Covid-19 pandemic has highlighted that now more than ever, benefits need to be adaptable to individual employee needs. No longer does a ‘one-size-fits-all’ approach to benefits work,” she said. All of a sudden, employee benefits had to come in all shapes and sizes – mostly born out of ensuring the health, happiness and safety of the workforce as it came through an unprecedented health crisis.

Working from home is far from easy. Challenges range from a lack of internet or tech infrastructure at home, to disruptions and distractions from children, pets, neighbours, etc. Add to this the tension that comes from an uncertain economy and looming job losses – compounding the stress of life under lockdown. The business environment responded positively, according to Mercer.

“Since the beginning of 2020, Australian organisations have had to rapidly introduce or adapt HR policies and benefits to support their employees. Just as where we work needs to be flexible, benefits also need to be flexible to a variety of employee circumstances,” explained Balcombe.

Care packages have been introduced for employees, complete with integrated wellbeing benefits such as fitness trackers, shared exercise challenges among employees, gym subscriptions and sleep app subscriptions, among others. Businesses also recognised that family and community had to come first during the crisis, with many offering benefits such as friends & family leave, or leave to volunteer at school events, etc.

Key here is that these benefits were offered based on individual employee needs, and not as blanket policies. For Mercer, this is the future of benefits. Experts have long suggested that people lie consulting firm highlights how no two people are the same.

“The first step to drive innovation in benefit programs is to deeply understand the diverse personas that exist in an organisation,” said Balcombe. For her, designing personalised benefit schemes can be achieved “by implementing an employee listening program and taking a data-driven, employee-centred approach to benefit design.”

State of benefits

This would be the next step for businesses in Australia. The good news is that many have already realised the value of employee wellbeing, and are making strides in this direction. Evidence of this comes from the pandemic response for one, and is reinforced by Mercer’s wider report findings.

Nearly 75% of Australian businesses already have a health and wellness programme in place, examples being vaccinations, health education and subsidised gym subscriptions. One area where Australia is making remarkable progress is primary caregiver leave. Not only are businesses increasing the amount of parental leave, they are also bringing fathers into these benefits – something that has historically only been offered to mothers.

Similar progress is being made in wealth and career development benefits as well. Pay transparency and equity has a long way to go, although it places on the priority list for several businesses. Reward strategies are also growing more common, although retirement benefits have stagnated since 2013, according to Mercer.

Career development is one area where most businesses see value, given the pressing need to develop digital skills. Nearly 70% now offer learning and development policies, and programmes to improve workforce capabilities. This is spurred on by the fact that most employees also now see the merits of reskilling or upskilling.