13)Practices of Compensation and Benefits in 5

8/13/2019 13)Practices of Compensation and Benefits in 5

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Practices of Compensation

And Benefits in 5 Countries

Nur Diana Binti Mohamad Rodi

2012771537

BM7001DF


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Compensation and Benefit Trends in:

Australia

United Kingdom

Brazil India

Mexico


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TOP BENEFITS CURRENTLY OFFERED:

1 2 3

Australia Income

protection

Travel

accident

Total

permanent

disability

Brazil Term lifeinsurance

Healthinsurance

Dentalinsurance

India Health

insurance

Critical illness

insurance

Pension

Mexico Life insurance Savings fund Health

insuranceUnited

Kingdom

Pension Private

medical

Life insurance


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COMPENSATION AND BENEFITS PRACTICES

IN AUSTRALIA


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Example is insurance component for productsincluding term life, disability and income

protection.

Employees may purchase additional insurancebenefits if offered, and costs are deducted fromtheir investment account.

Government-provided national health insurance butprivate supplemental health insurance is availableand frequently obtained.

The majority of Australians have not taken steps toaddress their financial security concerns, andownership of financial protection products is quitelow.


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Even though a wide majority of employees (76%)

and a majority of employers (52%) said they weresatisfied with their superannuation fund provider,

few express interest in purchasing additional

financial products and services through their fund.

only 40% of all Australian employees use afinancial professional banker, planner or

insurance agent

half of employers said they are aid employees by

offering financial planning services, including theprovision of personalized advice.


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one-third of Australian employees expressconfidence in their financial management skills,and they can make the right decision on financialmatters.

Employers and superannuation funds stress thevalue of workplace benefits to employees, such as

cost advantages, safety, simplicity andconvenience of voluntary benefits.

Innovative ways to save for retirement should alsobe of great interest to company benefits executivesand workers.

Source: The CIA World Fact Book or The WorldBank


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COMPENSATION AND BENEFITS PRACTICES IN

UNITED KINGDOM


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U.K. employees have broad health care and

some retirement coverage from nationalgovernment programs that are supplemented

by private pensions from employers.

About half of U.K. employers offer executive

benefits to their top management, with private

medical insurance (68%).

only one in five U.K. employees who receive

workplace benefits expressed a desire for a

wider array of voluntary benefits through the

workplace.


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U.K. is moving from a classical pension or

defined benefit system to a definedcontribution system.

Employees understand that there might be an

income difference between the traditional

defined benefit plan from their employer and

the new defined contribution system that they

must actively invest in.


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Employers showed a slight increase in their

willingness to offer general financial planningservices to their employees, though not for

personalized services. But only one in four

workers in the U.K. is even interested in their

employer offering such advice.

Source: 9th Annual Employee Benefits Trends

Study, MetLife, 2011


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BENEFITS OFFERED BY EMPLOYERS

Benefits Percentage (%)

Pension 90

Private medical (PMI) 72

Life assurance 69

Travel insurance 40

Critical illness insurance 30

Personal accident coverage 27

Annuities 7Long-term care insurance 4

Home insurance 3


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IN BRAZIL


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Employees who owns financial products are more

likely to own them through the workplace. Health insurance, life insurance and dental

insurance are the top products owned.

Of most interest to all Brazilian workers is health

insurance, cited by 90% as the most essentialproduct. This is followed by life insurance, dental

and medical check-ups.


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BENEFITS OFFERED TO EMPLOYEES


Health insurance 90

Life insurance 72

Dental insurance 59Grocery ticket 56

Retirement plan 53

Salary continuation in case of illness 48

Food benefit 43

Health check-up 30

Personal accident insurance 29


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Nearly 70% of employers are interested in providing

benefits that improve the work/life balance of their

workers. Such benefits include job sharing, flexible

working hours and telecommuting.

Employer focus on financial education because With

education about financial planning, employees will have

a better understanding of the products that can leadthem to a more secure retirement.

Since few Brazilian employers offer executive benefits,

companies could consider starting with voluntary

benefits for these key employees since they may have

more financial capacity to pay the costs of the benefits.


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IN INDIA


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OFFERINGS TO EMPLOYEES BY EMPLOYERS:


Provident fund 76

Bonus 73

Gratuity 56Paid vacation 51

Housing allowance 39

Education loan 22

Company car 11

Maternity allowance 10


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Regional Difference: Adapt Benefits Strategy

Mumbai: Employees in this city are significantly

unprepared for their retirement but are very

interested in receiving retirement advice at work.

Retirement planning may be beneficial for this

market. Delhi: employers are positively inclined toward

benefits, and employees have the highest interest

in receiving financial, benefits and retirement

advice at work. Financial advice based on lifestage may be a good opportunity for this city.


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IN MEXICO


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Large Potential with Regional Differences

Mexico City: Employees are interested ingetting products through their employer but donot see the advantages of voluntary benefits.So educating employers about the link

between benefits and retention might be agood strategy in Mexico City.

Guadalajara: Employers offer more benefitsthan required by law, and employees are moreinclined to own benefits through work. 90%have no step plan for retirement. So educationwould also work as a strategy in this city.


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Monterrey: Employers tend to offer only

those benefits required by law. Employees inthis city are less confident in making financialdecisions and significantly unprepared fortheir retirement. Retirement planning may be

beneficial for this market.

Leon: Employees tend to own productsthrough work and are positively inclined tovoluntary benefits. They have moderatefinancial concerns, with 60% not prepared forretirement. Education on voluntary benefits

and financial planning could be a door openerin this city.


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More than half of Mexican employers mentionedthat they would like to shift the costs of benefits to

their employees. Employers can focus on financialplanning assistance and voluntary benefits. Thesehave the advantages of providing benefits toemployees without the employer taking on largeadministrative and cost burdens.

Retirement, health insurance during retirement aswell as life and disability insurance are the top linefinancial products of interest to Mexicanemployees. Retirement products with tax benefitsare also growing in this country.

Source: INEGI (Instituto Nacional de Geografa yEstadstica), 2011


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The Potential of Voluntary Benefits

In Brazil, nearly half of all Brazilian employeeswho currently receive workplace benefits said theyare interested in a wider array of voluntary

benefits.

In Australia, the majority of employers are not

convinced that offering voluntary benefits shouldbe part of their strategy. Financial planningservices could be one of these voluntary benefits asonly 36% of Australian male employees and 24%of female employees said they were confident in

making financial decisions. In Mexico, 56% of workers who currently have

workplace benefits said they wanted a widerchoice of voluntary benefits.


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Common Challengesconfronting both multinational companies are:

1. Increasing the productivity of their workers

As the global economy continues to grow this yearand competition for customers rises, companieswill need to refine their benefits strategies to getmore out of their workers.

2. Retaining employees

Companies in all 5 countries should also reviewtheir benefits policies to make sure there is nodisconnect between what they offer and what theirworkers seek


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3. Controlling health and welfare benefits costs:

The continued acceleration of health care costsworldwide presents a challenge that will

require creative, long-term solutions involving

both the public and private sectors.

4. Confronting the retirement issue head on:

Pensions are costing more and people are

living longer, while government funds face

shortfalls.


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RECOMMENDATION

1. Connecting the dots:

Employers across the board need to better

understand the value that benefits can offer in

helping them address their top HR concerns in

this changing global economy.

2. Education:

Employers can stress the value of workplace

benefits to employees.


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13)Practices of Compensation and Benefits in 5

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