Employers offering increased benefits choices

Mercer’s poll of more than 1,700 organizations in 47 countries finds that one in four employers now offers choices within their benefits plan. One-third of those that do not offer choices are considering doing so.

Their primary reason for providing choice is to “respond to diverse workforce needs and values,” but a further factor is also the ability to manage costs. Nearly one-third of organizations offering choice programs said the strategy had helped them to reduce benefits costs.

According to the survey, 27% of employers provide at least some choice in the benefits they offer, while 14% have comprehensive flexible benefits programs. Comprehensive or “full flex” programs are defined as having core benefits and optional benefits with credits and a healthcare spending account.

“In the current economic environment, many employers can’t afford generous pay increases, so they are relying more on their benefits programs to keep employees happy,” says Beth Umland, Mercer’s head of health and benefits research.

She notes that nearly two-thirds (62%) of all respondents said that a very important priority for their health and benefits programs for the next few years would be “to increase employees’ understanding and appreciation of benefits.”

North America and Europe lead the way in the availability of benefits choice, followed by the Asia-Pacific region and Latin America.

Success
A vast majority of respondents (82%) say their choice programs had met their original objectives, and 83% report a positive employee response.

While most employers that do not offer choice benefits cite perceived costs as the reason (60%), the majority of employers offering choice have found that they are either cost neutral (42%) or save money (30%).

“We were interested to see that more than eight out of 10 employers with choice programs said these had met their original objectives, from both a business and an employee satisfaction perspective,” explains Umland. “Given this, we can expect the trend towards offering choice and full flex programs to continue—especially as advances in technology make them easier and less costly to administer.”

Choices
Insured benefits most likely to be offered are:

• medical (71%);
• life insurance (57%);
• dental (52%);
• accident (47%); and
• vision care (35%).

The most common allowances are:

• mobile phones/telecommunications (29%);
• cars (29%);
• gym memberships (28%);
• childcare (24%);
• food (18%);
• public transportation (15%); and
• housing (13%).

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