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With Millennials taking over the workforce, retaining employees has become much more difficult. Angeli Recella, Head of the Strategic Support Team at STORM Technologies, Inc., the largest flexible benefits and employee incentives firm in the Philippines, shares the advantages of offering flexible benefits.
The biggest challenge of human resource leaders is attracting, retaining, and motivating employees while maintaining the interests of the company. As the talent landscape changes and the market competition grows, it is all the more crucial that HR policies, strategies, and practices evolve to address the current and upcoming needs of the workforce.
One key area that allows for addressing these needs is that of employee benefits. A relevant benefits package not only attracts and retains talented workers, it also boosts overall work performance. The direct correlation between employee benefits satisfaction to strong organizational performance strongly urges human resource leaders to innovate in the benefits realm. However, in the Philippines, where three of five millennials are expected to leave their employer in the next two to five years, benefits have been delivered the same way for decades: one size fits all.
The Problem with Benefits Administration
A Demographic Upheaval
We are currently witnessing the merging of four generations of employees for the first time in the history of organizations. Baby Boomers and Generation X are becoming outnumbered by Millennials as the biggest population in the workforce. In fact, Millennials will comprise over half of employees by the year 2020. With Generation Z starting to pour into the workforce, employers face the challenge of creating an environment that embraces diversity and focuses on inclusion. This entails an employee benefits program that is relevant across all demographics.
Accelerated Rate of Change
Technology has enabled things and processes to change faster than ever before, pushing businesses to be more agile and forward-thinking lest they be rendered redundant. As market demands change, so do business objectives. Alignment between benefit strategy and business objectives is then more critical and high-maintenance.
The Rising Cost of Benefits
The Law of Non-Diminution, a labor law implemented in the Philippines, plays a big factor in companies’ hesitation to change the benefits they offer to employees. In essence, this states that once a certain benefit has been issued to an employee, this cannot be revoked. Given that the benefits share of compensation has already grown from ten to twenty percent over the last few years, this remains a hindrance to benefit innovation.
Flexible Benefits and Its Advantages
Offering flexible benefits is a proven solution to the demand for benefits innovation. For example, STORM Technologies, Inc. (formerly STORM Benefits) offers a unique flexible benefits platform that enables employers to implement a benefits plan addressing the unique needs of their employees.
A flexible benefits platform allows employees to choose the benefits relevant to them. In the case of STORM, they can either receive their benefits in status quo or convert some into FlexPoints with which they can purchase items on an exclusive online benefits store. This patent-pending conversion process means that employers are able to satisfy their employees’ needs regardless of generation.
Flexible benefits ensure that companies will not need to change their benefits offering every time their business objectives shift. Instead, employees can mix and match their benefits package at the start of every term year, enabling them to enjoy benefits relevant to the life stage they are in. With options ranging from appliances and gadgets to travel packages and sports equipment, employees may opt for a laptop one year and a gym membership the next. By simply giving employees this choice, job satisfaction can increase as employees’ needs are met year on year.
STORM offers flexible benefits free of charge as long as companies meet certain requirements. A feasibility study is conducted to determine a firm’s readiness for flexible benefits. From there, STORM partners with the HR team to implement the new system at no cost apart from their time and support.
In this day and age when technology allows for a diverse set of choices that are easily accessible, there is no reason for employers not to recognize the need for change. The challenge lies in carefully considering opportunities alongside their limitations and adapting fast enough so as not to miss out on valuable talent. Benefits, being an underutilized competitive advantage for firms, should be redesigned according to one’s business objectives and talent market expectations. The time to implement flexible benefits is now, or employers run the risk of being left behind.