'The state of the economy and the labour market are putting Singapore employers in a precarious position'
Rising costs in Singapore are affecting benefits strategies for many employers this year, according to a new report.
WTW's 2023 Benefits Trends Survey, which included 111 Singapore respondents, found that costs are the second most-cited factor (55%) influencing benefits strategies, just behind competition for talent (73%).
Other issues influencing benefits strategies include:
- Focus on diversity and inclusion (38%)
- Flexible work arrangements (33%)
- Rising mental health issues (19%)
- Organisation restructuring (18%)
- Economic weakness (15%)
- Focus on climate change and ESG (15%)
- Political or regulatory changes (11%)
- Volatility in financial markets (3%)
These findings also indicate that employers still believe investing in benefits should be a major priority to attract and retain talent, the most significant challenge for 77% of the respondents. Their other concerns include:
- Overall employee wellbeing (72%)
- Work engagement (68%)
- Employee productivity and effectiveness (62%)
Impact on benefits costs
Meanwhile, the report also found that budgets for benefits are also hit by the persistence of higher inflation (59%), as well as the weakening economy and business environment (52%).
Respondents said the higher inflation would have a "significant impact on their benefits budgets in the next two years," according to the report.
Singapore's core inflation was at five per cent in April, driven by lower inflation for services, food and retail, as well as other goods, according to the Monetary Authority of Singapore.
"The current state of the economy and the labour market are putting Singapore 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," said Audrey Tan, Head of Health & Benefits, Singapore, WTW, in a media release.
Mismatched expectations
In addition to these challenges, the report also found a "misalignment" between what benefits employees want and employers offer. According to the survey, the benefits employees want are:
- Flexible work arrangements (43%)
- Retirement plan or long-term finances (37%)
- Support employee benefits decisions (32%)
- Health benefits (32%)
- Career, training, and development (28%)
- Mental health support (22%)
- Risk and insurance benefits (22%)
- Family and caregiving support (22%)
- Financial wellbeing or short-term finances (21%)
- Social connections at work (17%)
On the other hand, employers are offering:
- Health benefits (74%)
- Mental health support (42%)
- Risk and insurance benefits (39%)
- Career, training, and development (36%)
- Flexible work arrangements (35%)
- Inclusion and diversity (31%)
- Family and caregiving support (14%)
- Social connections at work (10%)
- Community and social responsibility (6%)
- Financial wellbeing or short-term finances (5%)
- Support employee benefits decisions (5%)
The findings reflect the "changing" needs of employees and how demands for comprehensive benefit provisions are growing, according to Tan.
"To truly resonate with employees and gain a competitive advantage, companies must keep their ears close to the ground and get creative and flexible in rethinking their benefits strategies," she said.
