It is noticeable that the workplace has become increasingly competitive. With the ongoing war for talent and increasing employment costs, the majority of organisations are facing problems in recruiting and retaining talent. Employers commonly hold the view that ¡§Cash is King¡¨ and see higher pay as the foremost measure above all to attract top talent. But, is cash really king? Kevin Rice, Head of empower, has given his opinion on this topic.

Cash Is Not Always King
In early 2007, empower, part of Prudential Corporation Asia, commissioned Synovate and TNS to conduct research amongst advisers, employers and employees in Hong Kong on their thought about their current employee benefits and the likely impact of adopting flexible benefits. The research found out that benefits are highly valued by employees, which means many employers may be missing an opportunity when it comes to the recruitment and retention of staff. Employers can create a more attractive and differentiated offer by placing more emphasis on their whole value proposition instead of merely focusing on higher salaries at the recruitment stage.

One Size Does Not Fit All
No doubt employee benefits are an integral part of talent management, which also act as a link between other important components such as work/life balance, performance and recognition, career development etc of a proper talent management approach. As the war for talent rages, employee benefits have a key role to play in helping retain and engage talent. However, as reflected by the research, with increasing workforce diversity, it is becoming more difficult to make benefits appeal to all employees, and the gap between the benefits offered and those most valued by employees also proves that more variety and flexibility of compensation and benefits is needed.

Flex is All about Choice, Convenience & Cost Advantages
Flexible benefits, or flex, provide choice, convenience and cost advantages that are easy to access and simple to use. It enables employers to respond to workforce diversity by giving employees benefits that are customised to meet their individual needs at different stages of life. Employees can configure their benefits within a framework pre-set by their employer. By simply logging onto their personal account on the online flex scheme platform, employees can see their existing choices and make their own benefits selection. They can either reduce some level of benefits or trade them down and get some other benefits that are more relevant to them. Options are also available via email, mail, fax or phone; making employees feel empowered by getting to choose what best suit them conveniently and flexibly.

Organisations tend to invest a considerable amount in employee benefits. In the U.S and the U.K., the budget of benefits accounts for 15 to 25% of the total payroll cost, which is a significant investment in human resources. With the adoption of flex, the money is ensured to be used and allocated more efficiently and effectively. The investment in benefits is maximised as employees get more of what they want and less of what they don¡¦t, whilst the employer¡¦s offering of choice and flexibility to employees for a personalised benefits scheme also earns him better return of his investment in employee benefits spend.

Employees Feel Good about Choice
When asked about how they would react to having a more flexible benefits scheme (flex), most employees covered by the research had a very positive reaction to choice, convenience and cost advantage when available through their benefits scheme. The research also showed that flex can create greater employee engagement and increase employees?commitment to their job and loyalty to the company, something that employers are striving to achieve. A bank in the U.K. that has adopted flex also proved that there is a close relation between the number of benefits chosen and the engagement level of the staff in an internal survey. It means that the adoption of flexible benefits can create greater and better employee engagement to the company.

Flex in Hong Kong
Flex may be a rather new concept to Hong Kong employers, but it has long been adopted by Western countries where companies embrace it to differentiate themselves as an employer of choice. It is becoming an important way of rewarding employees, and employers in Asia such as Singapore are also seeing its advantages and are beginning to follow suit.

Although Hong Kong employers are yet to fully understand the advantages of flex, it is believed that the situation will undergo changes as the market is growing and competition is getting more acute. Employees will soon come to enjoy the convenience of being able to access more benefits choices through their employer¡¦s network. In facing the competition for talent, organisations in Hong Kong need to be more competitive in terms of offering on health, wealth and lifestyle benefits to enable their employees to make the most of their life, which is a significant factor in talent retention. Since last year, there has been a significant increase of the number of companies including some local based companies, making enquiries on the potential to have flexible benefits solutions put in place. It is thus foreseeable that flex will be more common in Hong Kong in the near future.

Considering the discrepancy in terms of culture, environment and practice between Hong Kong and the West, the concepts and principles of flex solutions adopted in different markets reflect the features of the places. With reference to the experience from the U.K., flexibility is provided around an existing package that will be tailored into specific marketplace. As a result, flex is highly adaptable and in different markets flex will have its local, regional and global flavours at the same time.

Communication is Vital
Despite the many advantages of flex, sometimes too many options may lead to confusion that makes employees less enthusiastic to do anything. As the research told, benefits are generally poorly communicated. Most employees are not fully aware of all the benefits provided to them and have even less understanding of the true value of the benefits. Communication on the guidance part is hence essential to assist employees in making their best choice. Indeed, many employees value the assistance from employers in understanding and maximising the potential of their benefits package, whilst making benefits more clear, accessible, and manageable also makes them more valuable to employees and increases their commitment to the organisation.

empower
Innovative Benefits Solutions
empower is an innovative employee benefits scheme from Prudential Corporation Asia, dedicated to providing employers with cost-effective flexible benefits solutions to recruit and retain talents. The service ranges from scheme design through benefits sourcing and management to communications, implementation and ongoing administration. empower helps organisations improve their ROl in employee benefits and transform employee benefits from an administrative burden to an efficient and cost-effective talent management tool that provides companies with a measurable advantage in the marketplace.