Companies urged to rethink employee reward programs to adapt to changing market conditions – Mercer’s 2013 Annual Benefits Review
- Average number of hours in the working week increases
- Effective benefits can improve the bottom line
- Flexibility and health/wellness initiatives continue to be key pillars of Australian benefit programs
According to Mercer’s 2013 Annual Benefits Review, Australian employers are becoming more creative and innovative with employee benefits in order to decrease staff turnover and increase employee morale; in a cost constrained environment and when the average amount of hours worked per week have increased.
Mercer’s Annual Benefits Review (ABR) investigates current market practice and emerging trends in remuneration and benefits management in Australia. It is based on current data from 353 organisations and helps employers understand Australian practice and their competitiveness in the market place.
The report found more companies have reported an increased number of hours worked per week from 38 to 40 hours in 2012 to 41 to 45 hours in 2013, highlighting the need for organisations to implement effective benefit plans to support and retain employees.
While the average amount of hours worked is increasing employers are providing greater flexibility in working hours to employees. Seventy five per cent of organisations are offering flexi-time and time off in lieu to allow employees to manage the demands of their jobs with their lifestyle.
Garry Adams, Talent Business Leader at Mercer Pacific said, “This benefit which may have previously been considered to be a competitive advantage for the organisation is now highly prevalent across the general market. Flexibility provides support to employees to balance their career at little cost to the organisation if managed appropriately.”
“An effective benefits plan doesn’t need to be costly, it might include the ability to purchase additional leave, gym and health club discounts or a ‘doona day’ as an additional day off to have when the employee desires. Often it’s about trust, flexibility and enabling the employee’s career to progress with their lifestyle.
“A Mercer study showed that companies who categorised themselves as having effective benefits, had better employee morale, significantly lower turnover and offered lower overall salary increases, which directly reduces costs and improves productivity.
“While we can easily get caught up in thinking of the cost of benefits, we can overlook that effective benefits can have a positive impact on the bottom line,” said Mr Adams.
The 2013 ABR reveals an increased list of innovative benefits within Australian organisations, examples include:
- A half day Friday each fortnight during summer,
- Free/subsidised boot camp/gym/yoga etc.,
- Allowance for car pooling or catching public transport,
- Free lunch once a week and,
- Sleep pods.
“The importance of benefits in a cost constrained environment should not be underestimated. Aligning the right benefits with a company’s culture can improve staff turnover and productivity by improving morale,” said Mr Adams.
The survey also found health and wellness programs to be highly prevalent across the general market with only 6% of organisations surveyed failing to provide any health and wellness benefits to employees. Similarly working from home is increasing, available in 75% of organisations.
“From the day an employee is recruited, to the time they leave your organisation, the remuneration and benefits strategy is one of the most complex, and sometimes controversial, issues of the employment relationship.
“As we see it, benefits form the backbone of an organisation’s culture and ultimately shape the success of the business.” Garry Adams said.
For further information or to arrange an interview with Garry Adams on the ABR findings please contact Bronte Tarn-Weir or Tara Mills.
Notes to Editor
About the Australian Benefits Review:
The Australian Benefits Review (ABR) is the employer’s guide to current market practice and emerging trends in remuneration and benefits management in Australian organisations.
Mercer collects information from a wide range of Australian organisations operating in all major industry groups and sectors.
Three hundred and fifty three organisations provided data for the 2013 edition of ABR by completing Mercer’s Benefits and HR Practices Questionnaire. Contribution from these organisations is acknowledged as invaluable in the information provided in this publication.
Subscribers to ABR can “data-mine” the information to gain an understanding of the benefits practices of like organisations. The information can be analysed by various parameters, including industry, organisation ownership and type, Australian head office location, organisation size, employee headcount and parent company location.
The Australian Benefits Review is complemented by the New Zealand Benefits Review, which provides a comprehensive coverage of remuneration and benefits practices in New Zealand.
Mercer is a global leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people. Mercer’s 20,000 employees are based in 43 countries and the firm operates in over 140 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 55,000 employees worldwide and annual revenue exceeding $12 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a global leader in management consulting. Follow Mercer on Twitter @MercerAU @MercerInsights