COVID-19 will accelerate innovation in Australian organisations’ benefit offerings, according to Mercer



Australia, 7 September, 2020 – According to Mercer’s 2020 Australian Benefits Review released today, over the last decade workplace benefit trends in Australia have shifted away from a blanket approach to employee benefits, and are moving towards a more flexible and individualised package for employees. As organisations transition out of the response phase to COVID-19 and transform for their new shape of work, their benefits will need to become adaptable, sustainable, and innovative to attract and retain top talent.


“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,” said Jessica Balcombe, Principal Consultant and General Markets Product Lead, 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.”


There has been greater focus on holistic employee wellbeing as work becomes increasingly integrated into employee’s home life. Some examples of integrated wellbeing benefits include providing fitness trackers and encouraging teams to set shared exercise challenges, providing subscriptions to paid sleep-aid apps, and family and friends leave, where employees get extra paid leave for purposes such as volunteering at children’s school events.


“During the initial lockdowns in Australia to combat COVID-19, organisations had to rapidly develop and deploy benefits in an uncertain environment to support their employees. Care packages for employees and families while in lockdown was an innovative benefit we saw pop up at the beginning of 2020. At Mercer, we deployed extra support and information sessions for parents working from home while also schooling kids, provided additional uncapped leave for wellbeing, and reimbursement for home office equipment. Ultimately organisations that strive to look after their employees will see the productivity gains of taking a preventative approach to supporting employee wellbeing,” added Balcombe.


As organisations plan for future workforce and business needs, HR policies and benefits urgently need to be reassessed to ensure they’re sustainable for the long term. Looking ahead, benefits will be critical to delivering a compelling employee experience that will engage key talent and can act as a differentiator to competitors. 


“The first step to drive innovation in benefit programs is to deeply understand the diverse personas that exist in an organisation,” said Balcombe. “By implementing an employee listening program and taking a data-driven, employee-centred approach to benefit design, organisations can be assured that their benefit investment will have the greatest possible impact while removing those benefits that aren’t used or valued, and focusing on those that matter.”


The Australian Benefits Review (ABR) is the largest and most comprehensive employee benefits data source in the Australian market. Collected in April each year, the data is gathered via an online questionnaire. The comprehensive 2020 report captures data from 370 participating organisations across a variety of industries. Intended as a single reference point for all major benefit and HR policy areas in the Australian market, ABR captures detailed information on wellbeing, wealth and career development policies to name a few. Learn more here



Additional findings



  • Over the past ten years, the number of organisations with health and wellness programs in place has grown by 15%; currently 74% of all organisations have a formal health or wellness program in place. The most common offerings include: flu vaccinations, health and wellbeing education sessions and discounted or subsidised gym access.
  • 82% of Australian organisations offer paid primary caregiver leave (12 weeks in addition to the government paid parental leave scheme, at the median). Over time, there has been a shift towards removing gender from parental leave policies with 12% more organisations now providing primary care giver leave to male employees. 
  • 36% of Australian organisations offer the ability to purchase additional leave, with most organisations offering up to 4 weeks purchased leave.  


  • Pay transparency and equity will remain a focal point as publically available data sources will multiply and employees grow more knowledgeable and informed. Currently 34% of organisations provide employees with some level of pay transparency, most commonly by sharing information about the organisation’s remuneration policy and practices. 
  • Total reward strategies have become more common with 68% of organisations reporting either a formal or informal strategy, and increasingly sophisticated as organisations move away from a one size fits all approach. Over the last five years there has been a 9% increase in organisations applying workforce segmentation of rewards with the number of organisations segmenting based on criticality of skills increasing by 12%.
  • There has been little change to retirement benefits over the past five to ten years. From July 2013, the Australian Government legislated increases to the superannuation guarantee (SG), moving from 9% to 12% of ordinary time earnings (OTE) over a series of stages. Only 24% of organisations currently provide more than the 9.5% SG. For organisations paying above the SG, the average contribution levels have remained largely unchanged at 12% (averaged across all career groups). This means that the added benefit for employees has diminished as the rest of the market has been forced to catch up. 

Career development

  • 67% of Australian organisations have a formal learning and development policy in place. The three most common areas an organisation will spend their learning and development budget are leadership, people management and coaching. 
  • Workforce capability and lack of future skills are seen as primary reasons why transformations fail, and reskilling is one of the investments organisations hope to maintain in a downturn. Just 28% identified cutting back on reskilling initiatives as a tactic to mitigate economic softening.
  • Employees see the value in reskilling, rating the opportunity to learn new skills and technologies as number one, alongside recognition for their contributions (43% and 42%). This is a major shift from the “desire for work/life balance” that we heard as #1 in 2019 (it fell to #8 this year).  




About Mercer

Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer’s more than 25,000 employees are based in 44 countries and the firm operates in over 130 countries. Mercer is a business of Marsh & McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with 76,000 colleagues and annual revenue of USD $17 billion. Through its market-leading businesses including MarshGuy Carpenter and Oliver Wyman, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit Follow Mercer on Twitter or LinkedIn.