Benefits have traditionally been provided on a "one-size-fits-all" model, meaning some employees gain greater value than others. Today, employees increasingly expect more personalized benefits that allow them to flex and utilize benefits depending on their particular needs and life stage. This allows employees to feel they are being treated equally, independent of circumstances (i.e., single or married). It's time to break the mold with a "non-traditional" approach that may include well-being incentives, opt-in/out insurance coverage and a design that allows individuals to claim parents' expenses or pet care expenses. Forward-thinking companies are on this journey already, but many aren't, as HR departments overestimate employee's satisfaction with the status quo. Why? They're afraid to ask. The risk of not asking can result in investing valuable budget on unused or underutilized benefits. Get to Know Your Employees Better   Don't be afraid to ask the tough questions. Gather feedback through engagement "spot" surveys or focus groups on what employees like and dislike in current offerings or what else would be beneficial. While it may be impossible to implement everything, it's a great opportunity to engage. Employees may not know what they need. Use data analytics to better understand what types of benefits (especially health) are being used the most and what's essential. Are people reporting that they want more well-being incentives, yet no one is taking advantage of your discounted gym membership offering? By combining qualitative and quantitative data, you can identify gaps. Sometimes, that gap is not on the offer itself but rather the communication around it. Communication Is Key   We often hear from HR, "Our employees have good knowledge of their benefits; we communicate them every year." This is not enough. Effective communication is key. Employees are time-poor with little patience for reviewing the fine print of policies. Why not get feedback on their preferred channels of communication? Find simple ways to communicate regularly, focusing on different benefit offerings. This can include infographics, interactive landing pages, videos or simply shorter, bite-sized information. Don't forget to tell employees why certain benefits are important — they don't always know! Flexible Doesn't Always Equate to $$$   Providing personalized benefits can be costly, but it doesn't have to be. It's about taking your current budget and creatively investing in employees in a way that resonates. Another benefit is confidence in knowing your investment is being used. Companies who invest the time in designing benefits that resonate with employees — throwing out the traditional approach by embracing new ways of more personalized thinking — will see a greater return on investment and a happier, more engaged workforce.

Feeling stressed by your management responsibilities? If so, you're not alone. In our latest norms, we found that just 67% of leaders and managers think the level of stress they experience at work is manageable; the other third was unsure or overwhelmed. A similar percentage said they struggle to maintain work-life balance. Just half of leaders and managers feel they have enough time to do a quality job, and only 48% feel they can detach from work. These results suggest that anywhere from a third to a half of leaders and managers are struggling to cope with the challenges of their job. When confronted with statistics like these, some just shrug and sigh: "Stress is part of the job, isn't it?" Based on a growing body of research, that's a dangerously defeatist perspective. Aside from the health risks associated with stress, there are a number of dysfunctional workplace dynamics that can emerge when leaders feel rundown, exhausted or emotionally drained. Barbara Fredrickson, Ph.D., for example, has found that negative emotions can trap people in a flight, fight or freeze mindset that limits their ability to think creatively and develop innovative solutions. Janne Skakon and colleagues1 have found that the way leaders cope with their stress trickles down, impacting their employees' own work experience and stress levels. And at Mercer|Sirota, we've found that overwhelmed managers are significantly less likely to recognize and praise their direct reports. If you're chronically stressed at work, it's time to stop buying into the myth that leaders and managers must be selfless martyrs. You're putting your own health and well-being, along with your team's effectiveness and engagement, at risk. Instead of working yourself to exhaustion, start developing a self-care strategy to manage the demands of your job. Here are four steps to consider: 1. Recognize the Warning Signs   Burnout — a state of physical, mental and emotional exhaustion often accompanied by self-doubt and cynicism — is a serious issue. Researchers have found prolonged periods of burnout can lead to a number of physical and mental health problems, including depression, anxiety, heart disease, high cholesterol, stroke and type 2 diabetes. Burnout can manifest itself in a number of ways, including increased irritability, decreased motivation, changes in eating or sleeping habits, or unexplainable aches and pains. 2. Rest and Recover   If you find you are experiencing burnout, you need to take immediate steps to get help. Start by telling someone what you are experiencing. Tell your boss, an HR business partner or a colleague. If you don't feel comfortable telling someone at work, then (a) realize you may be working in a toxic organization2 that is not healthy for you and (b) be sure to tell your family, friends or your doctor. If you remain silent, your exhaustion could lead to isolation and compound your problems. After you have shared your concerns, start finding ways to detach from work. Stop checking email the moment you wake up. Skip unnecessary meetings. Lighten your load. Take a mental health day. If you can reduce your hours or take a vacation, do so. Find ways to rest and reset so you can recover. 3. Reflect and Reorient   After you've gained some distance from your experience, it's time to start identifying the factors that led to your burnout. Start by reflecting on the timeline of events. When did your stress levels first start to rise? What was going on at work? Outside of work? Have you had this experience before, or is this the first time you've experienced burnout? Next, reflect on the nature of your stress. As you've probably heard, stress is not always bad. Researchers have found that challenge stress — the stress associated with achieving an important goal — is positively related to job satisfaction. Hindrance stress — the stress associated with barriers that prevent us from getting work done — is negatively related with job satisfaction. If you've had a burnout experience, you've probably been dealing with a lot of hindrance stress. With that in mind, think about the way work gets done in your organization. Some experts argue that burnout is the result of working in a dysfunctional organization. Finally, consider your own personality, values and attitudes toward work, your organization and your job. Researchers have found that people with certain personality traits are more prone to burnout.3 Through these reflections, your goal is to learn from your experience and gain insights that will prevent future episodes of burnout. 4. Rebuild a More Resilient You   If you have gone through burnout, the good news is this: you can use this experience to become a stronger, wiser and more resilient person. But that will require intentional effort on your part and a commitment to practicing self-care. As you design your own self-care plan, realize that multiple pathways exist. Start by rethinking your approach to your job; you will probably need to change some of your workday habits. Your physical health is critical: researchers have found that leaders and managers are more effective when they are eating right, sleeping well and getting exercise. Your mental perspective is also important: Stanford psychologist Alia Crum has argued that stress can be good for leaders if they know how to manage it. Be sure to consider your emotional response to the vicissitudes of work and life: research suggests that psychological flexibility and emotional agility can make you a more effective leader.4 And as you build your self-care plan, be sure to take a holistic approach, considering all aspects of who you are and what's important to you: research shows that your spiritual life — those aspects of your life that provide a sense of meaning, purpose and coherence — can help increase your resilience. As you consider these four steps, remember this: if you're not taking care of yourself, you're not going to be able to take care of your team — at least not for the long haul. At some point, your patience, your health, your energy, or your effectiveness is going to give. Without some type of self-care strategy, you're doing yourself — and the people who depend on you — a disservice. Sources: 1. Skakon, Janne; Nielsen, Karina; Borg, Vilhelm; Guzman, Jaime. "Are Leaders' Well-being, Behaviours and Style Associated with the Affective Well-being of Their Employees? A Systematic Review of Three Decades of Research." An International Journal of Work, Health & Organisations, Volume 24, Issue 2, 2010,https://www.tandfonline.com/doi/abs/10.1080/02678373.2010.495262. 2. Appelbaum, Steven and Roy-Girard, David. "Toxins in the Workplace: Affect on Organizations and Employees." Corporate Governance International Journal of Business in Society, 2007,https://www.researchgate.net/publication/242349375_Toxins_in_the_workplace_Affect_on_organizations_and_employees. 3. Scott, Elizabeth. "Traits and Attitudes That Increase Burnout Risk." Very Well Mind, May 20, 2019,https://www.verywellmind.com/mental-burnout-personality-traits-3144514. 4. Kashdana, Todd B. and Rottenberg, Jonathan. "Psychological Flexibility as a Fundamental Aspect of Health." Elsevier, Volume 30, Issue 7, November 2010,https://www.sciencedirect.com/science/article/pii/S0272735810000413?via%3Dihub.

The use of on-site clinics has been growing in recent years, with businesses realizing the potential for giving access to quality and timely care to contribute to an increase in productivity, reduce absenteeism and improve employee health. But, are you reaping the full benefits of your on-site clinics? Or, are you just focused on meeting legislative requirements? There are three key things you can do to unlock the full potential of your on-site clinics. In a recent Worksite Medical Clinics Survey, employers with on-site clinics saw a return on investment (ROI) of 1.5 or higher. If you're not seeing similar returns, it may be because your on-site clinic isn't moving beyond basic requirements. Create a Patient-centered Clinic   Ensure the services offered by the clinic are suited to your employees. This will eliminate unnecessary spend on under-utilized services and steer you toward investments that will bring a greater sense of satisfaction, positive health outcomes for your employees and, consequently, a positive impact on your bottom line. Understand what your employee population looks like — in terms of age, gender and nature of work — as this will play a large role in understanding what type of health and social care services, as well as specialists, are needed. In addition to demographic information, it's critical to understand the health needs of your employees — for instance, which common illnesses are prevalent and need to be better managed and which key lifestyle risks need to be averted through education or preventative services. Communicate the Value   The adage of "if you build it, they will come" might not be the best way to yield the desired ROI in this case. It's important to shape communications around services offered on-site by highlighting the value they bring to employees: convenience and easy access to care, coordination and orientation toward quality providers, early detection of illnesses, etc. Effective communication will bring increased utilization and early detection, maximizing your investment as an employer while also contributing to the well-being of your employees. On-site Clinic: The Wellness Hub   When on-site clinics are designed and managed correctly, there's a high return for both employer and employee. Well-designed clinics can play a real gatekeeping role, coordinating employee pathways toward high quality providers and wellness vendors. They can also directly provide prevention and employee education services, which are key to avoid acute and costly care events. At Mercer, we help clients implement the 4-C model of effective on-site clinic management. This extends the value of your clinic from meeting legislative requirements to allowing employers to deliver quality health services that focus on value to the employee. To maximize your on-site clinic, reach out to us today.

Offering flexibility in the workplace has become more commonplace, with more employers seeing the value of providing a greater variety of benefits and allowing employees to select the most suitable option for themselves and their families. However, some employers are still struggling with the flex benefits design and implementation. This is because employers are using traditional approaches to building and communicating benefits choices. Flexible benefits programs require a face-lift in the digital age, and this is accomplished through the use of data analytics and personalized communication. Today's employees not only expect more personalized benefits but also guidance on how to use them in an easily accessible way. They want to be able to access personal data insights at any time with any device. By integrating data with technology, employers can offer a "personal coach" on-demand that provides: 1.  Self-assessments that help employees understand what benefits they may need, enabling employees to select suitable benefits choices. 2.  Easy access to claims history to understand past needs and help inform future ones. 3.  An online marketplace for employees to purchase additional benefits, like travel insurance, fitness activity trackers or DNA screenings. 4.  Helpful medical cost information, such as average cost of clinical consultations, typical hospital surgery costs, etc., for employees to make smart choices. 5.  Interactive guidebook to illustrate benefits offerings to support employees through their life events, such as marriage, birth of newborn, promotion, etc. 6.  Reminders for employees to take action on their benefits. 7.  A tailored rewards statement to help an employee better understand the value of their benefits package. But the advantages of data analytics aren't just for employees. Employers can leverage real-time data using an online platform to better understand how benefits are being utilized. With the click of a button, you can see data charts and insights, like employees' selections, program usage and demographics for specific countries, using real-time data insights. This enables employers to review program effectiveness and make decisions on the plan design based on real-life data points. With the right technology and analytics mixed with personalized communication, the full potential of flex benefits programs can be realized. This not only has huge returns for an employer but also the employee. In fact, a recent Thomsons Online Benefits report found that 79% of employees surveyed who reported a variety of benefits to choose from also said they would recommend their employer to a friend. Using data analytics coupled with targeted communication enhances the employee experience and helps companies maximize the ROI for the benefits it provides its workforce. With flex benefits playing such a big role in staff retention and bringing on new talent, can you afford to miss out by using old methods?

In China, as in many other countries with growing economies, employee health management is a relatively new concept. This presents an exciting opportunity to create something new — but also generous room for error. A superior benefits program meets the diverse needs of active employees and retirees while aligning with the company’s business development and talent strategies. Although these dual goals may seem straightforward, it’s easy for HR to get sidetracked along the way. Have you steered clear of these four pitfalls? Misunderstanding 1: Benefits are Just for Brand-Building   Benefits design commonly goes through three phases: foundation-laying, boasting and returning to fundamentals. Young technology companies have a tendency to get stuck in phase two, coming up with fun, innovative and even newsworthy benefits. These less-traditional benefits programs have several advantages, including supplementing basic benefits and enhancing the program’s overall appeal. They can also help tech companies with a predominately young workforce connect with Millennial talent. For example, some Chinese companies offer an online shopping platform similar to Amazon through which employees can order household goods and other items to be delivered straight to their homes. Others focus on tokens of appreciation at stressful or eventful times of year. An e-commerce company might buy movie tickets for their employees and families after the hectic November 11 shopping festival — an online shopping bonanza that keeps e-commerce employees busy around the clock — to show gratitude for their hard work. But although such niche benefits are attractive in the short term, they have little long-term effect when applied on their own. Be careful not to get swept up in creativity at the expense of sound basic benefits. You can organize a race for charity to show you’re committed to employee health as well as social good, but if you can’t help an employee through a serious illness, how can you claim to care about the well-being of your workforce? The biggest health management challenge for Chinese businesses is staff turnover. New programs take time to launch, so little effect will be seen if the turnover rate is high. Investing in core benefits design yields more consistent results and helps retain employees, whereas short-term benefits solutions rarely build the brand. Misunderstanding 2: We Don’t Need to Design our Own Benefits Program – We can Just Copy our Competitors   Thoughtful design is by far the most important aspect of a successful benefits program for both basic and innovative offerings. Many companies focus on copying competitors’ designs or best practices. After all, benefits design is time-consuming and complicated; why not save on resources by leveraging an existing program? This line of thinking is dangerous. A benefits plan that works for one company, no matter how similar it seems, may not work for yours. Employee needs, business development goals, budget and future plans (in terms of costs and talent retention) must all be taken into account. It’s up to HR to look deep within the organization and ask fundamental questions: How much budget is available? Whom is the benefits program aimed at? What are the needs of the target employees and the corresponding risks? Caring for employee welfare means taking the time to customize a benefits program while taking into account the firm’s resources and priorities. Organizations with limited budgets profit from analyzing employee health data from biomedical screenings, medical claims and health risk assessments to identify the primary health challenges of target employees and design an appropriate program. Note that mental health, including managing stress, is just as important as physical well-being. Misunderstanding 3: Our Benefits are so Great, They Speak for Themselves   According to Mercer’s 2015 Benefits Communication Trend Survey of HR managers in China, more than 70% of employers think benefits communication is important. Yet only 17% of organizations have a specific role for employee benefits communication, and nearly 70% have little or no budget for benefits communication. Assuming your benefits programs will self-promote is a mistake. Even if your benefits are good, busy employees may not have time to learn about them and may misunderstand or underutilize them — substantially lowering your returns. Effective communication of benefits programs can: •       Improve employee retention and engagement •       Boost morale •       Improve employees’ health conditions and productivity •       Enhance employee trust •       Build the employer brand   Note that the organizations with high employee benefits satisfaction are the ones that effectively communicate the value of their benefits. Misunderstanding 4: All Aspects of our Benefits Program Must Show Returns   Return on investment (ROI) is a key performance indicator for many businesses. And with good reason — why invest in a project before ensuring a sound return on the investment? Although ROI is an excellent indicator of performance, not all benefits programs can be evaluated with numbers. When paired with comprehensive core benefits, health management programs and nontraditional benefits can have an underlying effect that is even greater than their immediately measurable impact. For many people, the feeling that their employer cares about their well-being means more than the money in their paycheck. The ongoing effectiveness of any benefits program ultimately depends on corporate culture: how your organization measures the value of benefits management, how it treats employees and whether it’s willing to put employee feedback into practice. Health management and benefits program design are still relatively new to Chinese companies, which tend to attach little importance to their employees’ health. But employee health is the foundation of an organization’s long-term success, and it requires investment in kind. In addition, in a high-growth economy with booming businesses, companies need to identify ways of attracting and retaining top talent. By avoiding these four pitfalls and focusing on tying programs to their firms’ long-term strategies, Chinese companies are enjoying the benefits of healthier, more engaged employees.

Office life can be extremely stressful, especially with the competitive nature of work and long hours that can lead to stress and sleep disorders for some employees. In fact, research by Mercer Marsh Benefits for our 2018 Medical Trends Around the World survey showed that globally the top three risk factors for employees remain metabolic and cardiovascular risk, dietary risk and emotional/mental risk. To put the global mental health problems into perspective, 1 in 3 people in the UK have been recorded as suffering from mental health issues.     The emphasis is now on employers to help with the mental wellbeing of their employees by providing comprehensive wellbeing strategies for emotional and mental health. Adopting integrated health and wellbeing strategies underpinned by stronger digital and data capabilities will be a critical factor in managing the rising costs of workforce health benefit programs. Employers are encouraged to adopt a whole system approach to wellbeing, in which mental health is recognized alongside physical health, as one of the essential building blocks to help employees fulfill their potential. But unfortunately, employers are slow to realize the risks concerned with mental health, with less than 50 percent of insurers and respective employer medical plans providing access to personal counseling. In Asia, mental health tends to be a taboo subject as it has a stigma around it and employees are concerned about coming forward with their issues in a fiercely competitive workplace environment. The Hong Kong Mental Morbidity Survey, a three-year study launched in 2010, found fewer than a quarter of people with common mental disorders had sought medical support in the previous year, and only 3.9 percent had seen a psychologist for help, reported SCMP. When we asked insurers: What three risk factors do you think influence employer sponsored group medical costs the most? Globally, as I mentioned earlier, mental health was third with 43 percent. However, in Asia mental health ranked bottom, behind occupational risk (44 percent) and environmental risk (51 percent), with 31 percent.  But this doesn’t mean that mental health benefit programs in Asia should be ignored by companies, even with the increase in medical costs worldwide. According to the 2018 Medical Trends Around the World survey, the global medical cost in 2017 increased at 9.5 percent, almost three times the inflation rate of 3.4 percent. Hong Kong’s increment was below the average global level but higher than the other two developed Asian cities, namely Singapore (8.6 percent) and South Korea (7 percent). “Hong Kong’s medical costs significantly outpaced the local inflation rate and employer’s cost on health care continues to grow. Therefore, employers should review the existing design of health care plans, further invest in data analytics and adopt a whole system approach in order to effectively manage employee health care cost,” Billy Wong, Mercer’s Health & MPF Business Leader, Hong Kong said. Employers can tackle the risk of mental health problems by launching workplace health strategies. Check out my ideas on ways to keep your workforce mentally healthy and happy.  Mindfulness Training: By implementing mindfulness training at work, employees will be able to effectively deal with stress, increase productivity in the office, maintain greater focus and their overall health will improve. But what exactly is mindfulness training? It’s a meditation technique aimed at focusing the mind on the present moment, which enhances an employee’s ability to work on day-to-day tasks and find balance. Fitness programs: The physical health benefits of working out are well documented, but exercise is also an effective way to boost your mental health. Exercise releases endorphins which make people feel happy. Employees who are feeling stressed, depressed or suffering from anxiety are advised to workout for 30 minutes a few times a week.  Flexible work schedule: Working from home and flexible work schedules give employees the freedom they need to stay motivated. The flexibility allows employees to take a break and lowers the risk of burnout. Working from home can reduce parenting stress as employees are afforded the flexibility to meet the needs that come with having a family. These factors and more increase employee morale and help to reduce absenteeism.  

Health is the new wealth. Our physical and mental well-being impacts every aspect of our lives—including our ability to be loving parents, supportive friends and successful professionals. Information about our health is profoundly personal. No one beyond our trusted medical caregivers should have access to our most private details. The sensitive nature of our medical records, however, makes them a coveted target for sophisticated cybercriminals. Growth economies are particularly vulnerable. Cybercriminals target healthcare for two fundamental reasons: the healthcare industry is a rich source of valuable personal data that commands a high dollar value on the black market, and the healthcare industry’s existing technologies and processes are fraught with vulnerabilities. The exponential growth of personal health data is being generated from an increasing number of connected devices and networks. By the end of 2020, about four billion people will be connected via the Internet of Medical Things (IoMT). According to the INFOSEC Institute, more than 70 percent of IoMT devices lack fundamental security safeguards as applications primarily focus on the features of the software rather than the security of the data. IoMT, therefore, presents cybersecurity experts with unprecedented challenges that require the collaboration of many different stakeholders and care providers within healthcare ecosystems. This is a growing war. Cyberattacks are increasing in terms of number, scale and level of sophistication. A recent CBI Insights report reveals that, “Since 2017, roughly six billion confidential digital records have been stolen from around the world and counting. Just in the last two years there have been at least three separate data breaches in which at least one billion confidential records were stolen or exposed at once.”1   From a single laptop in a rural village to elite teams of experts sponsored by nefarious governments, cybercriminals can operate from any location with an Internet connection, and they are targeting healthcare organizations in growth economies that have not implemented modern, sophisticated defense systems. Healthcare communities, cybersecurity professionals and governments must acknowledge these five stark realities as they seek ways to combat the persistent and ubiquitous threat of cyberhackers. 1. Healthcare has a target on its back.   The three main targets of cybercriminals are electronic health records, healthcare infrastructure and individual medical records. Sensitive information has become a very powerful commodity in modern society. Just as gold, diamonds and printed money have attracted thieves for centuries, information has become one of earth’s most valuable assets. The more sensitive, damaging or revealing the information is, the more value it possesses. Details about how healthy, or unhealthy, individuals and groups are can be ransomed for astronomical prices.     In July 2018, ransomware targeted SingHealth, Singapore’s largest healthcare institution, and stole the information of 1.5 million patients, including the profile of the country’s Prime Minister, Lee Hsien Loong—who was identified as a specific target in the attack. These types of ransomware attacks are constantly being perpetrated against healthcare facilities as they struggle to implement comprehensive defense strategies. This trend will only escalate as cybercriminals and healthcare institutions attempt to outsmart and outmaneuver each other as bank robbers and banks have done throughout history.2 2. Hacks can mean life or death.   One of the most concerning current threats to health information privacy is a serious compromise of the integrity and availability of data. Those risks include possible harm to a patient’s safety and health, loss of protected health information (PHI) and unauthorized access to data. In fact, in 2013 The Washington Post reported that the doctors for Vice President Dick Cheney ordered the disabling of the wireless functionality of his heart implant out of fear that it could be hacked by terrorists.3 It’s arguable that cybercrimes in the healthcare industry can have much more drastic consequences to brand equity for institutions than major financial losses. The fear of not being able to access one’s critical health information is a legitimate, and intense, sense of unease. This anxiety is partially what gives the information its value and power. Data security breaches can directly impact the health and well-being of patients, and even result in fatalities. Destroying medical records and hijacking critical pharmaceutical prescriptions can quickly result in casualties and cause death. By stealing information and manipulating public fear, cybercriminals can leverage their stolen assets in unprecedented ways. The reality is these crimes have life-threatening consequences and can be perpetrated from across the world in the middle of the night. 3. Breaches are inevitable and may be internal.   The potential monetary gains for cyberhackers are enormous. Unsurprisingly, more than 70 percent of healthcare industry companies expect a breach from financially-motivated cybercriminals. However, the pervasive image of a lone cyberhacker working from a dark apartment in an anonymous city, or nefarious state-sponsored groups of squinting cyberthieves lined up in rows of bland cubicles, only represents part of the story. Internal employees also pose a great threat to healthcare institutions. Every employee is a human being, and whether or not they are disgruntled, financially distraught or simply unaware of how their behaviors can impact security protocols, there is the potential for corruption. Having the right security clearances, passwords and access to sensitive information may simply be too tempting for internal employees with an ulterior motive.  4. Robust security measures are needed.   The cat-and-mouse chase and confrontations will continue to evolve as cyberhackers continuously seek new ways to penetrate the defenses of healthcare institutions and stakeholders within the healthcare systems—including the manufacturers of connected medical devices. Today’s international and tech-savvy criminals are determined, sophisticated and creative. Healthcare institutions must be even more so. Though the growing awareness of cybersecurity threats have shaken the entire industry, many companies in growth economies have not set up and executed a holistic security framework that provides comprehensive governance and board oversight. Security measures lack an integrated approach that leverages the talents and acumen of not only healthcare professionals, but cybersecurity forces and policymakers at every level of government. The seamless integration of defense resources is required to combat cybercriminals who pose a dynamic and evolving threat. All stakeholders dealing with health data should shift from passive cyber defenses, to active cyber defenses. Cybersecurity for IoMT must also be a major agenda for next-generation medical devices. Governments and policymakers should provide security guidance and regulatory protocols for medical device manufacturers. The industry must quickly develop and adopt best-practices, frameworks and architectures for ensuring cybersecurity protections across all of IoMT. Hospitals and health systems need to secure medical devices in the same way that banks ensure the security of the credit cards they issue. Growth economies must respond, and lead, with appropriate security measures and cybersecurity policies. 5. Healthcare can fight back.   Ransomware and cybercrimes can create unimaginable chaos. But businesses, communities and growth economies are not powerless. When working together, they can create a network of systems, assets and protocols that can thwart even the most tenacious hackers. Diligence is key. The healthcare industry must be proactive about preventing cyberattacks before they occur and be smart about responding to them and mitigating damage when they do occur. Though many healthcare institutions have begun to develop effective security strategies, few have implemented a complete plan that addresses preparation, prevention, detection, and response and recovery strategies.  The healthcare industry and associated stakeholders must approach cybersecurity defense strategies with the same level of seriousness and strength that militaries apply to their own defense strategies. For instance, an effective and aggressive defense program would include the use of deception technologies that stop attacks by deceiving the attackers. Also, artificial intelligence (AI) can monitor traffic in and out of each connected device and differentiate between normal and abnormal behavior in real-time—alerting network security professionals when the device is listening to or talking to criminal networks, servers or individuals. AI can proactively block bad actors in real time before they can gain access and inflict damage. Winning cybersecurity strategies intercept and prevent attacks proactively; after all, once a device has been compromised and higher-level servers have been breached, the damage has been done. Lastly, the healthcare industry should consider other innovative defensive measures such as quantum computing, cybersecurity war rooms that provide around-the-clock security operations centers, and a holistic strategy that leverages not only technology but also human behavior and processes. To learn more about how cybercriminals are holding healthcare institutions hostage, and what the industry can do to protect itself, read this whitepaper.   1 Why Ai, Blockchain, & Enhanced Encryption Are The Future Of Enterprise Data Security http://www.cbinsights.com/research/ai-blockchain-encryption-enterprise-data-security-expert-intelligence/ 2 Singapore Suffers 'most Serious' Data Breach, Affecting 1.5m Healthcare Patients Including Prime Minister Eileen Yu - https://www.zdnet.com/article/singapore-suffers-most-serious-data-breach-affecting-1-5m-healthcare-patients-including-prime/ 3 Intermountain Healthcare Launches Security Operations Center To Combat Health Data Cyberattacks https://www.modernhealthcare.com/article/20151114/MAGAZINE/311149977

Imagine this. At the start of his day Mike speaks to his smart phone and his virtual assistant pops up a personalized screen dedicated to his health and wellbeing.  There is a congratulatory message telling him he’s earned a reward voucher for his favorite cycling store for hitting his body composition target. The power of this system is that it integrates work needs with personal health requirements. It shows the morning’s schedule of meetings, and suggests a slot for a lunchtime group run that fits with his day. There is a to-do list already organized based on Mike’s priorities and deadlines, but also an analysis of last night’s sleep pattern, some suggestions for how to improve his sleep, and a flag that Mike needs to rehydrate if he is to maintain peak cognitive function. To create this pleasant morning ritual, Mike’s employer uses AI to connect and analyze data generated by his preferences, behaviors and biometric data. The new technology encourages Mike to bring his whole self to work and, by doing so, strengthens the connection to his employer. In the end, everyone benefits.  The scene described above provides a glimpse of the future of work, one where employers use digital technology, big data and AI to enhance employees’ entire well-being and strengthen that employer- employee relationship. Technology drives engagement, which then improves productivity and company culture. Employees want careers that complement their personal lives, not vice versa. This is seen with greater demand for role-flexing, which brings benefits to the employee and the employer. Fifty-one percent of employees want more flexible working options that allow for extended time off, for gym breaks, caregiving and avoiding rush-hour commutes (or commuting altogether).1 With this ability to balance, more headspace can be used for innovative ideas rather than worrying about who is picking up the children from school. Indeed, one in two employees wants a greater emphasis on well-being in the workplace.1 Technology is crucial in facilitating that desire. Technology not only enables employers to provide choice, flexibility and on-demand benefits in a practical sense, but also enhances the overall employee experience by being relevant to the audience of one. Employees now expect the technology experience they receive outside work to reflect the technology they are given access to inside work. Organizations who are slow to adopt will find they are actively disengaging their workforce. Since 61 percent of employees choose health as their top concern2, it is important to pay attention to this concern. Providing solutions that span the range of true well-being, from meditation apps, virtual doctor visits, biometric-led fitness coaching, and other tools enhances company values, culture and productivity.  That’s why Mercer acquired Thomsons Online Benefits in 2016 with its leading technology, Darwin. Darwin helps employees connect their benefits with their wider lives by giving them access to personalize their benefits offering. It provides employers with a single source of truth for benefits data, enabling a complete picture of your scheme at a country, regional, or worldwide level, and the ability to make better decisions about how to invest your benefits spend for optimum return on investment. For employers, offering customized solutions using technology helps personalize benefits for employees, resulting in higher impact and engagement. Companies that are using a technology-enabled approach are having the greatest success. Those with the technology to measure the impact of their benefits program are 80 percent more likely to respond to the employee need for well-being.3 We have only begun to scratch the surface on understanding how technology can be applied to advance well-being. Companies that invest in technology have a competitive advantage because their healthy, happy employees can thrive.4 By placing the diverse needs of their employee at the core of their efforts, employers can drive engagement and productivity to unimagined heights.                                1. Global Talent Trends Study 2018 https://www.mercer.com/our-thinking/career/global-talent-hr-trends.html 2 Global Talent Trends 2017 https://www.mercer.com/newsroom/global-talent-trends-2017.html 3 Global Employee Benefits Watch 2017/18 Report https://www.thomsons.com/resources/whitepapers/global-employee-benefits-watch-201718/ 4 Thriving in a Age Of Disruption https://www.mercer.com/our-thinking/thrive/thriving-in-a-disrupted-world.html

The resting heart rate for the average adult is somewhere between 60 to 100 heart beats per minute. Lower than 60 beats per minute indicates an individual, such as an athlete, with above average health. More than 100 beats per minute signifies a person with lower than average health—the type of man or woman one sees in almost every workplace, in every city from Bangkok to Nairobi. Modern society has made being unhealthy devastatingly easy. Unhealthy employees in growth economies pose risks not only to themselves and to their companies—but to the economic viability of their communities as they seek to compete in the global marketplace. Unhealthy employees take more sick days, require more costly health benefits and are generally less productive and energetic than their healthy counterparts.1 The need for healthy, productive employees is not only a concern for employers; it is increasingly becoming an issue among the employees themselves. As middle classes continue to proliferate in regions from Asia Pacific to Latin America, employees are demanding better working conditions and healthier lifestyles from their professional environments. However, workforces in growth markets continue to gravitate toward megacities with more than 10 million inhabitants—such as Mexico City, Mumbai, Sao Paulo and Shanghai. These population shifts are placing increasing pressure on the resources of these urban areas—exposing employees to unhealthy levels of pollution, sedentary/inactive lifestyles associated with extended commutes and limited access to safe and secure living conditions. Value the Health of Individual Employees   Growth economies are only as strong as the people that comprise them. The success of a business is traditionally measured by profits and losses, customer acquisitions, monthly sales and other data that shows where value is being lost or created. Success, however, is directly impacted by the productivity—and health—of a business’s employees. Every individual employee contributes to the success or failure of entire teams, departments and divisions. Each person counts. Businesses must evolve beyond the tendency to treat employees as a collective workforce of anonymous faces and job titles, and see them as individuals with specific skills, personalities and unique health and well-being needs—both physical and emotional. Simply stocking healthy snacks in the kitchen or giving an employee a birthday card isn’t an effective health initiative or psychological boost for most employees. Businesses in growth economies gain a competitive edge when they employ workers who feel appreciated as individuals. Attending to the health and well-being needs of every employee (and their loved ones) is a powerful means of communicating respect. Providing employees with access to benefits that genuinely serve their needs and sense of purpose will strengthen their connection to, and appreciation for, the surrounding professional community. In fact, that connection is no longer limited to isolated businesses or economies. A new generation of highly educated workforces throughout growth economies is leveraging unprecedented access to digital technologies—and connectivity—to drive demands for higher standards in the workplace. In particular, developed economies are leading a global conversation about universal employee concerns and workplace expectations—including better health and well-being services, financial wellness programs, professional development and educational support opportunities, and work-related risk management practices.   Businesses regularly scale to meet increased consumer and client demands, but often neglect to provide individual employees, within expanding workforces, basic support for a healthy work environment (e.g., adequate work stations—ergonomic and supportive chairs, proper monitors, for instance). Issues like unhealthy workspaces can be easily rectified with individual attention. Employers must address these critical details. The negative impact unhealthy employees have on productivity levels, efficiency and the bottom line are well documented.2 For employers, unhealthy employees pose risks not only to the current workforce, but also to potential hires and possibly future leaders of the business. First Impressions Impact the Hiring Process   Today, job candidates interview the company before they agree to being interviewed themselves. Before a diligent job candidate arrives for an interview, they have already researched the company’s website, studied the company’s mission statement and business philosophy—including its commitment to global diversity and inclusion policies—read the CEO’s blog posts and analyzed the benefits offered to individual employees at company headquarters and in local offices. As part of this research, it’s likely the candidate has even read through company reviews and ratings—feedback from both customers and current/former employees—via various online resources. Smart businesses know that talented professionals have high sensitivities regarding situational awareness, and prepare accordingly. Businesses that do not invest in making a positive first impression with job candidates will lose them, and their skills and talents, to competitors. If a highly desired job candidate walks out of the elevator and passes rows of cubicles lined with unhealthy and tired employees, a sense of concern immediately overtakes them. The health of a business’s employees could, understandably, be a direct reflection of their work-life balance and workplace environment – maybe even their health benefits. If a company’s workforce appears to be overstressed, overworked or uninspired, then that top job candidate will eliminate the potential employer before the first handshake. The impact ‘unhealthy’ employees have on the nuances of employer branding and recruiting are less quantifiable than other workforce metrics—but no less important. Current employees offer future employees a window into their futures. Rediscovering Balance in the Modern Workplace   Workforces and employers in growth economies are struggling to adjust to evolutions in technology and modern work-life balance paradigms. The era of our personal and professional lives being separate states of existence are gone. Digital devices and communication technologies have erased the lines that delineated when and where a person worked. The result is a confusing amalgamation of untethered expectations from bosses and spouses, children and coworkers, personal time and work-related hours. The modern-day employee is trapped in a vortex of demands that are no longer contained by time or place. Unsurprisingly, employees everywhere are suffering, both physically and emotionally, from this imbalance. Many employers in growth markets, thankfully, are finally recognizing this widespread problem. Business leaders in growth markets are implementing real strategies to make their employees healthier, happier and more productive. Savvy employers acknowledge that healthy pursuits and balanced lifestyles are not personal matters solely pursued outside of business hours. Most employees spend the majority of their waking hours at work, and it is during these hours that employers can offer the most effective programs to achieve good health. In China, Huawei and Perfect World, the winners of Mercer China’s 2016-2017 China Healthiest Company survey, offer employees groundbreaking in-house healthcare programs. The amenities include dedicated nurse practitioners, medical services centers (that provide blood screening and other tests) and meditation sessions designed to decrease stress and increase wellness. The future of healthy employees begins with workplaces that prioritize healthy activities as an important part of an employee’s work schedule. In Latin America, 1 in 3 companies already provide well-being programs for their workforces.4 In Mexico, American Express has implemented health and well-being centers that provide care and support resources to employees; and, in Brazil, employers like Schneider Electric have received recognition and awards for their wellness programs and diversity and inclusion efforts. An Era of Work and Wellness   Effective growth economy workforces of the future will have employees who feel healthy on every level. Reduced absenteeism, lower healthcare-related expenses and increased productivity levels are all obvious reasons to offer in-house wellness resources and programs. In terms of costs and benefits, the math is easy. However, the human impact is invaluable. Employees are a business’s most important investment, and future employees can easily see if an employer is currently investing in the well-being of their people. For today’s top talent, the health of a company’s existing employees can be a deal breaker. Technology will drive the future of health, especially in the growth economies that quickly embrace digital transformation. Currently, in Brazil there are more than 200 startups developing digital solutions in health management and services.5 Modern devices can constantly monitor our heart rates, stress levels and overall wellness. Both employers and employees will be able to use real-time data to create optimum working conditions and schedules for employees working in a world without boundaries. Encouraging workers to eat better, exercise more and stimulate their minds and creativity through cerebral exercises is critical to building strong employer brands that attract and retain top talent. Companies must offer employees a future without back problems, mental illness and heart rates over 100 beats per minute. 1 Healthy Workforce https://www.cdcfoundation.org/businesspulse/healthy-workforce-infographic 2 The Portion Of Health Care Costs Associated With Lifestyle ... https://journals.lww.com/joem/Abstract/2015/12000/The_Portion_of... 3 Who Are China's Healthiest Employers? – Thrive Global – Medium Yan Mei - https://medium.com/thrive-global/who-are-chinas-healthiest-employers-72af8c1215b0 4 Health Techs https://insights.liga.ventures/healthtechs/ 5 Health Techs https://insights.liga.ventures/healthtechs/

The constant advancements in technology open up a wide variety of new choices for people, helping us build our own digital world. We can now do our weekly shopping in fully automated grocery stores that rely on cameras and sensors to track what shoppers remove from the shelves, and what they put back. The rise of the Internet of Things (IoT) has personalized our homes by allowing devices to “talk” to each other. An example of this is a smart fridge with a built-in camera that displays the contents of the fridge on smartphones, which is another way technology makes shopping for groceries more convenient. Businesses know that employees enjoy and make full use of computers and smartphones outside of work, so with change happening all around us, why is the way we communicate benefits not changing? This is a topic I discussed at the recent 2018 Employee Benefits event in Singapore, and I’ll go into further detail about it here. Today, employees want new ways of working and an experience that offers just–in-time, intuitive digital access, personalization, and wellness. But that isn’t easy. HR departments are under increasing pressure to not only design cost effective and attractive benefit programs, but also to deliver them in ways that demonstrate they truly care. Fifty-three percent of employers communicate with their employees once a year about benefits. And the once a year communication is typically carried out in two standard ways: in person at the renewal session or by giving employees a handbook.1 Increasing the frequency of communication is one of the quickest ways for employers to boost employee engagement and appreciation of their benefits, and it’s worthwhile as employees who feel their needs are being met are 2x more likely to advocate. What’s the best way to do this? For employers, making the experience digital is the future. However, this does not mean changes need to be made to the benefits design, there are many ways to enhance communication methods. Four tips to make your benefit communication more like a consumer experience:   1. On brand: The names of brands are everywhere–on billboards, television, in shops, etc. showing that commodities and how we perceive them play a pivotal role in our lives. Therefore, branding your digital experience plays an important role in ensuring employees recognize the importance of benefits and it also helps to boost awareness. 2. Interactive: The days of encyclopedia-sized employee handbooks filled with pages of extensive benefit entitlements written in insurance jargon are a thing of a past. However, a more user-friendly employee handbook is still relevant, and employers are now advised to create responsive materials that function like an app or website instead of static ones, to help employees communicate effectively. 3. Personalized: Our research shows that by adding a personal touch to employees’ benefits information helps to develop an individual journey. An example of this is using personalized videos with individual names embedded in the clip to show employees their statements. This approach increases action, trust and appreciation among staff. 4. Social: Everyone (pretty much) is on one social media platform or another and employers need to take advantage of this by leveraging what their employees are saying on these channels. Sharing positive stories from employees about their benefits or their enjoyment working for the company is a fantastic way to attract talent and boost morale. It also reinforces your standing as a company.   Utilizing these four tips will help increase awareness of benefits, explain what employees get out of their benefits, help employees understand which plan is right for them, and, finally, the employees will share their experiences and speak positively about it.   1 2017 Benefits Under The Lens Survey by Mercer Marsh Benefits

A healthy workforce is vital to ensuring the productivity of a company, but is it the sole responsibility of employers to keep their employees healthy or should the responsibility be shared? The size of a company obviously plays a part as smaller businesses find it harder to commit finances to ensure the wellbeing of their staff compared to bigger multinationals. However, budget is a big concern for lots of companies when it comes to building benefits packages, a point that was highlighted at the 2018 Employee Benefits event through a live audience poll. Attendees were asked: What’s stopping you from taking action on wellness initiatives? Budget was the top answer, with HR professionals saying they are worried about ROI. But this doesn’t mean employees at smaller companies are left behind. Benefit plans can be adapted to individual markets and tailored to deliver exactly what employees expect. For example, in Japan, which is well-known for its intense work culture, companies offer health benefits that include mandatory stress-related exams. On an even smaller scale, companies can boost the wellbeing of their staff by doing something as simple as adding healthy food to the pantry. Health is also about mental wellbeing. In Singapore, employees are known to ask about a company’s leave policy and if there’s flexible working hours before starting a job. Both are important when it comes to helping employees deal with stress and enjoying a healthy work-life balance. Furthermore, in the office, more and more companies are using wellbeing ambassadors to help get their benefits messages across. The ambassadors are chosen because they are passionate about health and they share their knowledge with colleagues. Another question for the audience at the event was, “What is important to your decision making process on where your focus should be?” The top answers were assessing internal data and how the packages will fit into their company. In today’s world, the benefits programs we use were designed 10 years ago, and a lot of them are no longer relevant to employees’ needs. Times have changed, and it is now up to employers to evolve and reimagine ways to reach people and restructure their programs – keeping the employee experience at the center. The aforementioned topics and more, were discussed when experts in the fields of health and benefits gathered at the 2018 Employee Benefits event in Singapore to participate in a panel discussion on “Health and Wellness - A Shared Responsibility”. The panel discussion was moderated by Liana Attard, Asia Consulting Leader, Mercer Marsh Benefits, and featured Fiona Chia, Founder of Health Can Be Fun, Masters in Human Nutrition; Gan Sow Chat, AP Benefits Director, Honeywell International; Rahul Ramaswami, International Benefits Manager, Standard Chartered; and Godelieve van Dooren, Regional Industries and Products Leader, Mercer.

Typically, when weighing the pros and cons of a job, people consider the salary, the location, and the opportunities for professional growth and personal fulfillment. But here is a new consideration: quality of life. Welcome to working in a world forever altered by climate change, escalating populations and urban sprawl. These global environmental problems are impacting some regions particularly hard, most notably Asia and its megacities. What Is 6.3 Days a Year Worth to You?   According to a recent Mercer Marsh Benefits research report, “Medical Trends Around the World 2018,” the leading health risk to Asian employees is environmental risks, especially indoor/outdoor air pollution. Respiratory illnesses and related diseases are at disturbing levels across Asia, where medical inflation is around 10% for the entire region.[1] The stakes are high for Asian economies, including China, which is the world’s second-largest economy, employing more than 774.5 million people. Many decades of unbridled growth and lax environmental laws have taken a devastating toll on China and its workforce, especially its urban areas. Workers in Asian megacities, particularly in northern China, are familiar with the terminology of pollution. Particle matter (PM) count is just another component of the weather, like the percent chance of rain or the air temperature. Residents of megacities know that a PM 2.5 means hazardous pollution levels, and to mitigate activities that involve breathing unhealthy air. Going for a jog or commuting to work by bicycle without wearing a mask can contribute to debilitating health consequences. Companies are, however, taking steps to defend the health of their employees, by providing preventative solutions such as indoor air purifiers, offering educational programs (including smoking cessation), and allowing flex scheduling on days with high PM levels. But more needs to be done. The Guardian reports that China and India are attributed with half of all premature pollution-related deaths in 2015, which amounts to about 6.5 million deaths every year, according to a WHO study on indoor and outdoor pollution.[2] The destructive consequences of bad air in Asia have become unavoidable workplace issues, with employers and employees finally acknowledging the costs to health and productivity. For some perspective, the German Institute of Global and Area Studies discovered that high-level filtration systems could improve the life expectancy of office staff, in one organization’s China office, by an average of 6.3 days a year. Consider that for a minute: losing about a week of your life every year because you live and work in a city plagued by pollution. High-level filtration system? Yes, please. Environmental Heroes: Asia’s Growing Middle Class   Something interesting happens when families enter the middle class and become accustomed to a higher quality of life. Instead of fighting for survival and worrying from one day to the next about how to provide for their children, they increasingly engage with the world around them. They purchase and enjoy the nice shoes they’ve always wanted. They buy healthier ingredients and eat healthier foods. They take time to appreciate life and leisure, instead of being constantly overwhelmed by the struggle to simply exist. For an emerging middle class, quality of life factors—like health and fitness—become a regular expectation. Asia’s growing middle class does not expect to work in environments—workplaces included—that threaten their well-being. These rising expectations are driving an environmental movement across Asia. Take China, for example, where middle-class demands for better conditions are urging the Chinese government to take action. In fact, China revised the Air Pollution Prevention Law in 2014, which defined local governments’ rights and responsibilities in air pollution control. In January 2018, China launched a government initiative to assess and address public health issues created by environmental pollution.[3] These efforts signify a monumental shift in government policy as it officially recognizes the problem, and thereby invites a discussion about the cost of economic expansion as it relates to the health of its citizens and employees. The Way Forward: Innovating for a Healthy Workforce   Asia, like the rest of the world, has a long way to go in pollution reduction. However, there is no progress unless there is first an acknowledgment of the problem, and secondly, real resources are mobilized and marshalled in the right direction. Asia’s governments, employers, and people are focused on the continued growth of the region’s economies, but these endeavors cannot reach their full potential if pollution and unhealthy conditions undermine the productivity of Asian workforces. To solve these formidable environmental problems, Asia and the international community, must rely on human ingenuity and innovation to clean up the mess we have made and left for our children—the world’s future workforce. The air pollution problem in Asia may inspire real, meaningful change.[4] Megacities and local governments are working hard to improve conditions and grow beyond the images of smog-plagued urban settings posted on the Internet. This bodes well for the region’s employers, employees, and expats who make a living in these metropolises. And if you need any evidence of Asia’s commitment to improving air pollution levels, check out the “world’s biggest air purifier” that China just built. For residents and employees in Xi'an, China, it just may be a lifesaver. 1 2018 Mercer Marsh Benefits Medical Trend Survey https://www.mercer.com/our-thinking/health/mercer-marsh-benefits-medical-trends-survey-2018.html 2 How Clean Indoor Air Is Becoming China's Latest Luxury Must-have Helen Roxburgh - https://www.theguardian.com/cities/2018/mar/27/china-clean-air-indoor-quality-shanghai-cordis-hongqiao-filters 3 China To Monitor Human Health Impacts Of Pollution For First Time Li Jing - http://www.climatechangenews.com/2018/01/31/china-monitor-human-health-impacts-pollution-first-time/ 4 How a 'toxic Cocktail' Is Posing a Troubling Health Risk in China's Cities https://e360.yale.edu/features/how-a-toxic-cocktail-is-posing-a-troubling-health-risk-in-chinese-cities

No two organizations are the same. Each has different employees, strategies and business objectives. The same principle applies to managing your healthcare costs. The solution is unique to you, and companies across Asia are getting creative in exploring alternative approaches to managing benefits spend. Often, companies have a one-dimensional understanding of their medical schemes gleaned through external benchmarks. But other players in the healthcare ecosystem - employees and providers - are just as crucial as employers in the ecosystem. While the government provides statutory healthcare benefits in many countries, these tend not to be enough to provide adequate coverage, and therefore, the employer ends up bearing the responsibility of providing medical protection to employees and their families. As for providers, these are the doctors, clinics, hospitals, and vendors that are being used directly by employees; thus, it’s just as important to choose the right providers and manage their behaviors and costs effectively. Lastly in the healthcare ecosystem are the employees; the employees are the everyday users of the health plan, and thus managing employees’ wellbeing before they fall ill becomes critical for organizations to manage benefits spend. In a perfect healthcare ecosystem, all groups work hand-in-hand. But in reality, the system is fragmented and complex. Across Asia, there’s inevitable market imperfections, from rising medical inflation projected at 10 percent for 2018 1 to inconsistently defined healthcare quality, where employees tend to make emotional rather than rational purchases of services, and have a difficult time differentiating from right and wrong, and good and bad. Thus, in this environment, how do you make sure healthcare costs are affordable for you as an employer and for your employees as the consumer? Make Healthcare Relevant As an employer, you bear a lot of the medical costs, so you need to choose the right cost containment measures. Start by looking at your data. This includes studying employee demographics, such as age, gender and family mix. Your HR should also have data on employee absence, from how much sick leave they take to how long before they return to work. Wellness data can be gathered from any wellness or lifestyle program you have in place, such as an annual check-up, maternity program or biometric testing. On top of this, you have medical claims data – medical providers used, drugs prescribed and any disabilities within your workforce. All this data provides you with a comprehensive medical record of your employees, giving you a 360-degree view of their health and risk profiles. When you link all of this data together, it allows you to design targeted programs specific to your employees’ needs. This is the key to your benefits spend management. But how do you get to the point of effectively managing your healthcare spend? Meet Your Employees’ Needs with 7 Customization Tactics You have probably tried the more traditional approaches such as looking at cutting your plan design, re-marketing your plans or squeezing your insurer to reduce its premiums. However, with medical costs rapidly rising, these tactics are not sustainable in the long run. What can we look at instead? Does it make sense to offer one plan for all employees when their needs and behaviors are different? One size does not fit all, so consider customizing your plan design. Steering Employees Through Design Fund Your Medical Plan to Manage Your Risk Exposure Regarding financing approaches, the traditional approach is to fully insure the plan – that is, pay the insurer upfront premiums. The insurer then pays out all of the claims and takes on the risk. At the other end of the spectrum, is the self-insured model. In this scenario, you as an employer are now responsible for paying all claims. You are not tied to the insurer’s administration or retention costs. By self-insuring, you have the flexibility to decide the terms and plan the design of your medical scheme. In between these two extremes is the hybrid approach. Here, some employers place high-risk groups under a fully-insured scheme and self-insure the rest of the employees. For example, a high-risk group could be your expatriate employees who prefer more expensive hospitals due to language or culture constraints. Another approach is to place benefits with higher claims volatility, like inpatient coverage, under a fully-insured scheme while self-insuring other coverages – such as outpatient, dental and vision – that are more stable in terms of claims volatility. This method manages your risk exposure and helps control your overall costs. Another growing trend in Asia is premium co-sharing where companies partially subsidize employees’ medical insurance costs, typically in the range of 20 percent-50 percent. These alternatives are all part of a shift away from the employer taking a paternalistic approach to a facilitator approach. As an employer, you are still providing a safety net for employees, but with a focus on defining minimum standards of care. For this to happen, you need the right vendors who share your vision and can execute on this plan. Taking Responsibility Employees are also an integral part of the healthcare ecosystem. Three common risks employers face from their employees include: 1. Utilization: the increasing use of medical schemes leading to higher costs; 2. Healthcare: the risk of poor health and illnesses; and 3. Productivity: the loss of productivity at work due to illness. All three carry significant financial implications. The solution is in prevention and education. So when you roll out your healthcare programs, the key is to inspire and convince employees that well-being is their responsibility. Not just physical, but emotional and financial wellness too. There are hundreds of vendors, web-based programs, apps and tools today that aim to deliver wellness solutions and incentivize people to change their behaviors for the better. Once again, use the data you have to select a few that resonate with your employees’ needs and can link to cost drivers in your claims experience or health screening. To successfully care for your employees’ health, while managing your costs, it is important to work with and across the different stakeholders within the healthcare ecosystem. It is only then will you bring about change in the way medical protection and care is provided to your employees. All three carry significant financial implications. The solution is in prevention and education. So when you roll out your healthcare programs, the key is to inspire and convince employees that well-being is their responsibility. Not just physical, but emotional and financial wellness too. There are hundreds of vendors, web-based programs, apps and tools today that aim to deliver wellness solutions and incentivize people to change their behaviors for the better. Once again, use the data you have to select a few that resonate with your employees’ needs and can link to cost drivers in your claims experience or health screening. To successfully care for your employees’ health, while managing your costs, it is important to work with and across the different stakeholders within the healthcare ecosystem. It is only then will you bring about change in the way medical protection and care is provided to your employees. Here are the 8 solutions that are gaining popularity: 1 https://www.mercer.com/our-thinking/health/mercer-marsh-benefits-medical-trends-survey-2018-digital.html

According to the recent report “Medical Trends Around the World 2018” by Mercer Marsh Benefits (MMB), international medical costs increased by an average of 9.5% in 2017, almost three times the estimated inflation rate. The rising costs associated with healthcare are a pressing concern for HR leaders with a need for resources, policies and practices that support a healthy and productive workforce while keeping expenses to a minimum. HR professionals must leverage the latest disruptive trends and workforce health care strategies to thrive in increasingly competitive business environments where there is a renewed focus on cultivating a thriving and engaged workforce. This requires a proactive effort by HR leaders to move beyond their comfort zones and integrate the following three personas into their role responsibilities and leadership styles and prepare employees for a future where health impacts the wealth of both the individual and the employer. Persona #1: Empathetic Champion of Mental Health   Much has been written about the importance of emotional intelligence or EIQ in leadership roles. However, most of those discussions simply emphasize the value of being able to relate to other people and “walk in their shoes” for a while. As a result, many companies have instituted lifestyle changes to their business models, whether that be through the promotion of flexible-working practices such as allowing employees to telecommute, providing employees career development and educational opportunities, or encouraging employees to volunteer in their community or join a gym. However, focusing on supporting the mental and emotional wellbeing of their employees presents companies with tremendous opportunities to elevate employee productivity, increase workplace morale, reduce absence and improve retention. In fact, the MMB report reveals that less than 50% of insurers and respective employer medical plans provide access to personal counseling. Progressive HR professionals who see through antiquated stereotypes about mental health issues are poised to lead their companies into the future. Preventative holistic care and wellness initiatives can save businesses millions of dollars on health care expenses by proactively preventing and treating employee mental health issues such as anxiety and depression, substance abuse, postpartum mental health, workplace stress, and other often overlooked conditions, as well as areas like sleep disorders. Persona #2: Unrelenting Facilitator-in-Chief   HR leaders must take responsibility for empowering their employees to engage and utilize the resources available to them. HR pros should leverage the various ways their particular workforces interact with information, communicate their needs, and access employee benefit programs. The MMB report elaborates, “The top communication mechanisms for 2017 continued to be fairly traditional: websites, call centers and digital brochures, as well as paper booklets. This is another area ripe for disruption. By assuming the role of Facilitator-in-Chief, HR leaders can directly improve inefficient bureaucracies and processes that hamper the employee-insurer relationship. In China, HR is collaborating with insurers to streamline services and information. “Some insurers in China are helping members by providing pre-authorization and medical provider referrals with ease. Others utilize a care team to provide members with health advisory services, or they have a case manager assist in making decisions. In addition, some insurers are also providing healthcare seminars to help members make smarter decisions regarding their healthcare needs.” HR leaders must advocate for improving technologies and processes that frustrate employees and prevent them from accessing the services they need to work effectively. Persona #3: Political Activist for Policy Change   Meaningful change happens at an excruciatingly slow pace. Governments, legislative bodies, and policymakers lag far behind the evolving demands of modern employees and employers. Today, HR leaders play a more important role in communicating the needs of contemporary workforces than ever before. These are revolutionary times – HR, human capital management and industry leaders across the planet must serve as the voice for millions of workers who are being let down by outdated programs that serve misaligned priorities. John Deegan from MMB explains, “As health care costs become more material (outside the U.S.), employers are also questioning the intent and design of programs. Given the digital health revolution underway, we are seeing progressive employers redefine health and benefit principles and question traditional medical insurance designs, many of which were based on receiving crisis treatment in a hospital setting. And while it is starting in the U.S., the evolution towards value-based care, where providers are paid based on outcomes instead of fee for service, will demand innovation from the (global) insurance community.” Only through political mechanisms can enduring changes to insurance regulations be implemented throughout the world’s nations. HR leaders are uniquely positioned to advocate for new health care policies for employees and employers. By adopting these three personas into their leadership dynamics, HR professionals can lead the way to a better, more affordable future. As Andrew Perry of MMB asserts, “Health insurance is ripe for disruption around the world.”  

Retirement is changing globally. This is particularly true in Japan, where for decades, lifetime employment at the same employer and a state pension were practically guaranteed. But the 21st century has brought about many changes to the country and lifestyle practices of the people in it. The modern workforce is also evolving as a result. Companies are abandoning lifetime employment due to the heavy burden that such conventions bring. Young people are thinking more strategically about their careers, not just in terms of stability and salary, but also regarding what will help them grow professionally and retire soundly. A recent Mercer study Healthy, Wealthy and Workwise: The New Imperatives for Financial Security, recently looked at attitudes towards financial security and beliefs about retirement. The 12-country study surveyed 7,000 adults across six age groups, as well as 600 senior executives in business and government. In Japan, the study found that financial security is low, and people are more likely to feel stressed about their financial situation than in other countries. It was not just finances that concerned the Japanese. Across all measures – health, wealth and career – confidence in Japan was much lower than in any other country surveyed. This is in large part because the old ways of approaching retirement – which included relying heavily on the concept of lifetime employment and the safety net of state pensions – are in transition. A savings gap triggered by state dependencies   Compared to other Asian countries, most notably China, Japan is facing a significant savings gap, especially among people over age 50. But this may be largely due to how retirement was structured. Japanese workers used to have lifetime employment with seniority-based pay, and state pensions were based on these salaries. Now, the Ministry of Health, Labour and Welfare says that the target income replacement ratio of the state pension for a model worker in the private sector is at 50 percent. It is also notable that Japan’s universal health care is quite good. Health is a big spend in post-retirement, and knowing that the state will cover much of your health costs may be one contributing factor as to why the savings rate in Japan is below that of other countries. Both globally and in Japan, people rank health – now and in later years – as the most important factor for a financially secure retirement and a good post-retirement quality of life. However, in Japan, only 12 percent of respondents said they had excellent or very good health as it relates to performance on the job. This was much lower than the global average of 39 percent. Financial pessimism signals opportunity for financial education   In Japan, there are moderate, even pessimistic expectations when it comes to financial security and retirement planning. Up until the economic bubble burst in the early 1990s, the traditional trajectory was that someone would join a company right out of college and stay there until the retirement age of 60. The state would then pay pension and health benefits. This was especially true if you worked for a large, multinational company. The average working person did not have to worry too much about retirement. After the bubble burst, many companies struggled financially in the two decades of recession that followed. As a consequence, pension plans were reduced and lifetime employment commitments were cut down. For young people coming out of college, they realized the retirement options of their parents’ generation were no longer an option for them. Even when Japan raised its retirement age to 65, which is lower than most developed countries, they knew relying on the old ways for financial planning was unsustainable. Suddenly, the onus of planning for retirement fell onto the individual. Even though many Japanese people now realize it is their responsibility to save, since this is a new concept, how to do so remains somewhat ambiguous. The financial education and guidance on the matter is minimal. Half (49 percent) of Japanese participants in the study said they need financial security to retire well, and only a quarter (28 percent) felt financially secure now. And less than a quarter (21 percent) expected to maintain a desired quality of life after fully retiring. Most startlingly, only eight percent were confident they had saved enough to provide income for retirement. The research also found that, in Japan, 84 percent of people are willing to make trade-offs – that is, save more or spend less – to afford a longer and better future. Sixteen percent of people, however, would not change anything about their current lifestyle, even if it meant they were unable to maintain their desired quality of life in retirement. This may be because Japanese workers expect to work for a long time, retire later than 65, and are more likely than other nations to feel that they may never retire. Longer lives mean shorter and more modest retirements   Today, people in Japan expect to spend 12-17 years in retirement — less than the global average of 15-20 years. These realities require flexibility in benefits as retirement needs and savings vary and affect decisions to continue working or adjust lifestyles. The Healthy, Wealthy and Workwise study found that over half of Japanese adults (53 percent) expect to live past age 80. Seventy-three percent, however, do not ever expect to retire or expect to keep working in some capacity after retirement — among the highest of the 12 countries in the global study. And 26 percent specifically cite continuing in paid work as the key source of their retirement income, albeit the fact that senior workers are increasingly facing challenges to keep their skill-set employable beyond the traditional notion of retirement age. Most expect to live modestly in retirement, relying on a combination of government-provided pension, personal savings and paid work. In Japan, there is a strong focus on family and self as being responsible for ensuring sufficient income in retirement. Although the Japanese do place trust in their employer to provide advice, they are less likely to trust any other people or organization on planning, saving and investing for retirement. Further, individuals are much more likely to be paying into a government-provided pension than into an employer pension plan. In Japan, employer pension plans are much less likely to be seen as a potential income source. Opportunities for change   Japan currently has an overlapping approach to retirement: the older generation that is still reasonably expecting lifetime employment and pension systems, and the younger generation that understands they have to save for themselves and approach career planning accordingly. With that in mind, there are opportunities for change at a state level. Perhaps social security should be seen only as a safety net, and not a luxury, and only available to those much older, perhaps in their 80s. When combined with work and a company pension, people would have a better assessment of their financial needs if the structure of retirement planning were updated. As it stands, the younger generation feels they are facing new territory when it comes to savings, often without a lot of resources or education. Globally and in Japan, being healthy, wealthy and work-wise will mean working longer and investing in our health, savings and job skills. To do so, workers need to feel personally empowered through their employers as well as the government, both of whom should explore opportunities for change to match the evolving needs of the modern workforce.

Change is a constant, but the pace of change is greater than ever, with greater impact on the way organizations run their global benefits programs  Many factors involved are outside a company’s direct control, but nonetheless, put increasing pressure on the investment in, design and execution of — and value provided by — benefits within the wider value proposition. Major trends — occurring at both societal and business levels — influencing how organizations think about their global benefits programs include: Business globalization HR needs to be agile, respond to change quickly, achieve global consistency to ensure quality and efficiency, have single global suppliers to better control the supply chain and streamline operations to reduce costs and manual processes. Workforce pressures Organizations need to address skills shortages while appealing to multiple generations, retaining employees in a mobile world and tackling the challenges of an aging workforce. Digitization The focus on cloud-based technology and automation to improve efficiencies and effectiveness while meeting executives’ demand for data-driven HR decisions and employees’ desire for a consumer-grade technology experience is growing. Regulation and health costs Regulatory reform, worsening health/ wellness profiles, spiraling health costs and demand for greater employee choice all add to the complexity of global benefits programs.   Given these challenges, many organizations find their current benefits approach isn’t delivering desired results. Many have no global strategy in place, and those that do are typically managing benefits manually or are using different local systems, making consistency and governance nearly impossible. But it doesn’t have to be this way. By harnessing the power of technology and the data within it to inform and optimize each part of the benefits process, employers can address key concerns and derive valuable results for their businesses. Transforming HR Technology   No one likes to perform low-value administrative tasks or deal with mistakes and errors — people want to make a difference at work. Thankfully, automation algorithms are changing the role of HR, replacing manual administration and allowing teams to focus on value-added work. Research by Gartner shows that by 2020, half of roles will be impacted or even totally disrupted by technology[1]. This is further demonstrated by research from Sierra-Cedar showing that recruitment for administrative roles is decreasing even as recruitment for HR technology and analytics roles is on the rise[2]. As this shift continues, analytics will become the only way to inform decision-making, and artificial intelligence (AI) will become the new way to support employees and provide service. For the first time, employers will be able to measure every aspect of their benefits strategy and delivery to optimize performance by evaluating success and adapting to challenges as they arise. Employees Demand Consumer-Grade Experience   In the past few years, employees have started making more decisions about their careers based on experiences with their employers. Some 80% of millennials reach for their smartphones when they wake[3]. People increasingly buy products based on how quickly they can get their delivery. So it’s hardly surprising that 82% of millennials say workplace technology would influence them when deciding whether to accept a new job[4]. Companies that understand and accept this cultural shift are responding by eliminating paper-based processes. But the pace of workplace technology adoption has been slow. To meet employee demands and secure the best talent, employers must reconsider how they serve their employees. AI is Driving Self-Service on Demand   In the digital world, AI is rapidly becoming the best way to support employees and provide service — a major reason tech giants are investing enormously in this space. In fact, most investment analysts see 2017 as the year AI functioning as a personal assistant really starts to take hold[⁵]. It’s not just about employees. A large ecosystem is now being developed in the corporate world to improve the roles of contact centers and improve customer experiences. Contrary to conventional wisdom, the best customer service isn’t focused on servicing the unhappiest of clients but on ensuring minimal contact. Anyone who has used online chat support has likely had a good portion of the conversation automated and perhaps dealt with an agent who has simply checked prepopulated responses. Every time an agent marks a response as correct, the bot learns, improving the customerexperience. Data Drives HR Decision Making   In the employee arena, companies are sitting on huge amounts of data, leading to changes in the way they make decisions. In coming years, executive leaders will increasingly expect all recommendations to be based on real-time, accurate and even predictive data. Ultimately, the role of human capital management vendors will change — as will the way companies think about buying from them. For many employers benefits command the single largest spend outside of pay, yet chief HR officers currently devote a tiny portion of their time to ensuring they’re getting the maximum value. Analytics will provide the ability to unlock the value of the enormous benefits spend — giving benefits increasingly strategic importance to the chief HR officer. The Role of Benefits is Changing   These changes couldn’t come at a better time. Traditionally, benefits were used to provide a safety net in a working career in case an employee died, developed a long-term illness or needed income in retirement. But workers today no longer stay with their employers for life — 72% of workers expect to change their jobs more than three times in their careers[⁶]. As a result, the relationship between employee and company has changed. At the same time, companies have been shifting liabilities to their workforces. As employers recognize that a healthier, happier and more engaged workforce creates a more productive organization, benefits trends are undergoing major change. Companies want to focus more on health and wellness so employees won’t get sick — and will get back to work quickly if they do get sick. Employers also want to help alleviate employees’ everyday worries. In short, they want their benefits programs to show their workers that they care and are doing the most they can to help. Technology has aided this transition as companies move more benefits into reimbursement-style accounts that empower employees in managing their health and finances. Employers can also take advantage of platforms that allow users to access information on the move in a format that’s relevant to them. Furthermore, the proliferation of wearable trackers and gamification helps promote employee dedication to health and wellness. Mercer Marsh Benefits Powered By Darwin: A New Solution   Having a vision for a better approach to global benefits is one thing; delivering it in the right way is another. Given the transforming HR arena and the growing focus on digital technology, Mercer Marsh Benefits has developed and tailored an approach to addressing organizations’ needs as they go down this path of disruption. Too often, global benefits management is focused on fixing immediate problems or using tactical responses rather than setting strategies and plans in motion to drive the right outcomes — whether for engagement, productivity, sustainability or effectiveness — in a demonstrable way. Proactive organizations seek a partner that is flexible enough to address unique needs and stay adaptable over time rather than simply dictating a course of action. Global consistency is also essential, as is expertise with regulatory compliance. Ultimately, multinationals need a partner with an eye on the future to see coming trends and develop responses before others do. Darwin™, acquired by Mercer in December 2016, is a cloud-based, technology-driven solution that meets these needs for all aspects of benefits communication and administration. It communicates and manages global benefits day to day, in multiple currencies and languages, helping improve user experiences, efficiency of processes and informed decision making. It also helps transform the broking process, with globally consistent data that accelerates the adoption of international pooling and captives, providing better long-term financing and risk management solutions for global benefits. The technology also improves consultancy, harnessing data and engagement with employees to drive deeper insights and identify trends and patterns. The uniqueness of the solution is in how it transforms the role of anyone who works with benefits. Non-value added activities become automated, eliminating waste and elevating individuals’ roles, driving outcomes for the company and employee alike. Conclusion   As HR contends with a host of mounting challenges — globalization, workforce pressures, digitization, regulatory reform, healthcare costs — it’s also being asked to step up and find new ways of working, spending less time performing wasteful administrative tasks and focusing more on becoming strategic advisors who drive business outcomes. Many organizations still struggle with strategic benefits management and are ill-equipped to address these trends. The rise of powerful technology platforms, such as Darwin, along with providing consulting expertise will help HR harness the power of its data to gain maximum insights and optimize the benefits management process. This, in turn, will transform decision-making to drive desired outcomes and, ultimately, create business value for the organization as a whole.   1 Gartner. “Gartner Reveals Top Predictions for IT Organizations and Users for 2016 and Beyond” [press release] (October 6, 2015). 2 Sierra-Cedar. 2015–2016 HR Systems Survey White Paper. 18th Annual Edition (2015). 3 Zogby Analytics. Millennial Study (2014). 4 Dell. “Dell and Intel Future Workforce Study Provides Key Insights Into Technology Trends Shaping the Modern Global Workplace” [press release] (April 2, 2013). 5 Brackenridge G. “Machine Learning Is Transforming Investment Strategies for Asset Managers” [commentary] CNBC (June 6, 2017) 6 Hays. Gen Y and the World of Work (2013)

What is Behavioral Economics?   Behavioral economics theory diverges from traditional economic theory by asserting that individuals don’t always act out of self-interest — that is, we don’t always engage in behaviors that help us maximize benefits and minimize costs. We can be over-reliant on the first piece of information that’s presented to us; we’re often unduly influenced by who relays information to us; and we have a tendency to do what those around us do — inclinations which can prevent us from making good decisions. How Can Behavioral Economics Be Applied to Health Interventions?   Put simply, our behaviors impact our health. Noncommunicable diseases, which include cardiovascular diseases, certain cancers, chronic respiratory disorders and diabetes, account for 70 percent of deaths worldwide.[1] These diseases are largely the result of lifestyle choices: The World Health Organization attributes nearly all premature deaths to smoking, unhealthy diet, physical inactivity and harmful use of alcohol.[2] These findings strongly suggest that the root cause of preventable premature deaths is poor decision-making. Making better personal decisions can help reverse this negative trend, potentially preventing millions of premature deaths per decade.[3] How can we encourage people to make better lifestyle choices? According to Sophia Van, Chief Technology Officer at Mercer Marsh Benefits, applying behavioral economics and gamification can help get people “hooked” on healthy behaviors, making a positive impact on health and reducing mortality risks. As just one example, the “quantified self” movement — using wearable technology to monitor the foods we eat and the amount of exercise we get each day — is promoting healthier lifestyles by encouraging people to track, and thus change, their behaviors. Incentivizing Employees to Make Healthier Choices   South Africa’s largest insurer, Discovery, in partnership with Vitality Group, has pioneered a wellness insurance program that harnesses the power of behavioral economics to engage employees and motivate them to make better health decisions. Discovery was among the first to incorporate lifestyle factors into its life and health insurance underwriting model. The program demonstrates that providing members with incentives helps create sustainable change. Offering rebates of between 10 percent and 25 percent for purchases of fruits, vegetables and other healthy foods nudged members to eat healthier.[4] Rewarding those who completed a “Vitality Age” test — a survey designed to assess overall health — with movie tickets helped increase members’ engagement with their health.[5] Discovery tracked engagement results over a five-year period, with one of the categories being exercise. Initially, about 50 percent of those in the program were inactive; by the end of the five-year period, that percentage fell to 30 percent. This reduced hospital costs by 6 percent per member for those who started to exercise.[6] Unlike other business models built solely on wearables, Discovery’s model has proved to be sustainable because it’s based on an innovative customer engagement platform that offers members incentives and rewards. Applying Behavioral Economics Principles to Benefits Selection   More and more employers are providing flexible benefits options, allowing employees to select benefits products ranging from medical insurance and dental/vision care to lifestyle products (such as gym memberships) to suit their needs. Employers purchase a fixed number of flex credits for every employee, and employees are given the option of purchasing additional credits for premium products. When we apply behavioral economics principles to better understand the behaviors of individuals who shop for flexible benefits online, we find three barriers that prohibit individuals from making better benefits decisions: 1. Low motivation Individuals log in to an online benefits mall only once or twice a year to make their benefits selections. They may not fully appreciate the value of their benefits and may not be willing to spend time and effort in making their selections. Employer-purchased benefits often go unused. No matter how well designed a flex benefits program is, if the program isn’t being used, it can’t help individuals achieve their desired health goals.   2. Difficulty making decisions When presented with too much information, individuals may “freeze” and make no decision at all. If employees can’t readily understand how the benefits products being offered relate to them personally, they may not fully utilize them. People seek “social proof,” such as product reviews, for what to buy or what service to use. Without knowing how their peers in a similar life stage choose their benefits, people may revert to the “no decision” default.   3. Perceptions about price Individuals often don’t fully understand the true value of products and are attracted by discounts and free goods. If they don’t see discounts or “freebies” associated with the benefits products being offered, they may choose other products or look elsewhere for their benefits needs.   To overcome these challenges, organizations can use strategies anchored by behavioral economics principles to enhance benefits selection for employees: Promoting a Healthy Workforce   Putting behavioral economics principles into action can help growth markets employers overcome the obstacles that prevent their employees from adopting healthier behaviors. These efforts can shape the way employees interact with their benefits for the better, helping organizations and their people create sustainable behavior change and achieve their health management goals.   1 World Health Organization, “The Top 10 Causes of Death,” January 2017, available at http://www.who.int/mediacentre/factsheets/fs310/en/ 2 World Health Organization, Global Action Plan for the Prevention and Control of Noncommunicable Diseases 2013–2020, available at http://apps.who.int/iris/ bitstream/10665/94384/1/9789241506236_eng.pdf 3 Ralph L. Kenney, “Personal Decisions Are the Leading Cause of Death,” Operations Research 56.5, November–December 2008, available at https://orsagouge. pbworks.com/f/keeney.pdf 4 “How Discovery Keeps Innovating,” available at http://healthcare.mckinsey.com/how-discovery-keeps-innovating 5 Discovery Vitality, 2014 Vitality Journal: Improving Health and Reducing the Cost of Health Care Through Lifestyle Interventions. 6 The Digital Insurer, “In View: Discovery Health Vitality Wellness Program,” available at https://www.the-digital-insurer.com/dia/discovery-health-vitality- wellness-program/ 7 Piyanka Jain, “Five Behavioral Economics Principles Marketers Can’t Afford to Ignore,” Forbes, March 1, 2013.

Even without extensive resources, organizations can create communications that help employees realize the full value of their benefits — breaking the cycle of endless tweaking by HR to gain a few more points of employee satisfaction. Across Asia, employers are under constant pressure to make their employee benefits programs more innovative, effective, cost-efficient and sustainable. However, the challenge is not just to improve on these parameters but also to differentiate the program. Eighty percent of organizations state that they are driven to differentiate their benefits package in order to attract prospective talent and retain high-potential individuals.[1] As a result, organizations spend considerable time and money structuring highly competitive programs and retaining vendors with best-in-class technology and customer service. However, no matter how competitive, innovative and unique the benefits program is (and no matter how many times this is validated by external studies and independent consultants), too often, programs fail to engage employees. HR is then stuck in an endless cycle of searching for something new to introduce or change. The key to breaking out of this cycle is not to keep introducing shiny new tools in the hope that “this one” will finally satisfy your audience, but to execute an effective communication and branding strategy. Why not treat the internal branding of your employee benefits package the same way your firm would launch an external marketing campaign? The goal of such a campaign is to convince the end user that your product/service is the best available option, with the ultimate goal of gaining a loyal, repeat customer. The same logic should be applied to the branding and communication of your benefits program. What’s more, this internal campaign can be simple and low-cost. Understanding Your Audience: Where to Start   With nearly one in five companies reporting that they don’t communicate their benefits to employees at all, the opportunity to improve is huge. Where should you start when devising a benefits communication and branding strategy? • Focus on your audience: Spend some time thinking about who will be at the receiving end of your communications material — who makes up your workforce? How old are they? Are they male or female? Which life stage are they in? (Are they single, married, have young families?) Or are they getting ready for retirement? Where are they located? (Are they offsite, do they travel often, do they work remotely?) What language do they speak and what is their work schedule? For example, when it comes to employee benefits programs, one segment of your workforce may value work-life balance and corporate discount programs, whereas another may be more interested in learning about retirement and financial planning tools. These various groups may also prefer different communication styles and channels — email versus a print flyer versus being pinged by an iPhone app. All these variables should be taken into account when structuring a targeted communication strategy. • Identify your internal resources: Feeling overwhelmed? The good news is that even lean HR teams can create an effective employee communications program. Many organizations have internal communications and/or marketing functions that may be ready to lend a helping hand. A simple example would be to use your organization’s corporate branding guidelines as the foundation upon which to build your benefits communications. Although they may be restrictive, communication standards can also provide guidance and should be considered. Remember that branding should go beyond a nice logo and a slogan — it should evoke the feeling that you want employees to have when they engage with their benefits experience. This insight is the most valuable aspect of effective communications, and it doesn’t cost anything. • Get the lay of the land: Carry out an internal audit of all communications collateral already in place. What materials are available to employees (briefing decks, employee handbooks, posters, etc.), and where are they located? Are they easily accessible? Do you have data that show how effective the communication has been? What communication channels are you already using, and what other platforms may be available (intranet, TVs in your break area, online survey tools or even your CEO blog)? You’ll likely be surprised by how much you already have at your disposal to bolster your communications. 1 Mercer. Benefits Under the Lens, 2016.

How Do You Define Flexible Benefits?   Many employers in Asia view flex as a complicated and difficult-to-administer benefits structure delivered through an expensive portal. This definition of flex programs is no longer correct. Today, “flexible benefits” means offering employees choice through an effective design, delivered via an engaging portal and promoted with unique branding and communications. Flexible benefits can be as simple and straightforward as offering employees the choice of two or three fixed benefits packages or voluntary top-up benefits. Even cash is a form of choice. Why Flex?   The implementation of an effective flex program can be an affordable way for employers to increase the value of benefits while offering options that can easily be tailored to fit diverse employee profiles, needs and life stages. Such programs can increase the value of benefits at no additional cost, fill gaps in employer-paid benefits and build corporate branding through increased engagement. From an employee perspective, flex allows individuals to select the benefits features that best suit them and their families. In more mature markets, such as the United States, United Kingdom and Australia, the flex concept has been used to this effect for some time.  Are Flexible Benefits Working?   Based on the 50 percent of employers say they support offering choices, yet only 16 percent actually offer them1.  Although some employers may be tempted to consider implementing flex, the vast majority choose not to because of the perceived complexity. Thus, despite maintained interest, flex plans in Asia are not picking up momentum. Perception Versus Reality   The unfavorable opinion toward flexible benefits programs in Asia is perpetuated by the fact that few employers use tangible metrics to evaluate their programs. Why Are Flex Plans Failing Asia?   Flexible benefits programs can be simple and effective but have not actually been successful in engaging employees because of four key pitfalls:  1. Too much choice: Existing choice programs struggle to achieve success because they offer too many choices with too little differentiation. This compounds administration complexity and makes communicating benefits difficult. The value of the benefit is lost on employees as they struggle to understand what’s being offered and what it means for them. 2. Designed based on market benchmarking data alone: This means employers are taking an external view only and missing the internal perspective of ensuring the plan supports business goals and meets the needs of their unique employee profile. 3. No regular review: Too often, a plan receives only a few tweaks to design and structure over the years. Only comprehensive, regular revision can ensure that the plan continues to meet changing business goals and employee needs. 4. No branding and/or communication strategy: The program should be branded to resonate with employees, offer engaging, guided decision-making and be communicated throughout the year using various media.   The Importance of Taking a Total Rewards Approach With the current talent shortage in Asia, cash is no longer king. Employer focus needs to shift away from compensation alone. But the reality is that many employers are still struggling to see benefits beyond just medical, risk (life and disability) and retirement programs. Employers need to expand their view of benefits to be all encompassing. Flex isn’t a single component of the total rewards framework but can roll into career, work-life balance, how and where we work (including telecommuting and flexible work arrangements) – event the desks you sit at and the snacks in your pantry. Steps to Implementing an Effective Flexible Benefits Program   Define Your Goals For the program to support the business objectives of the organization, it’s important to define what success looks like for you. Is the ultimate objective productivity? Managing your budget? Or people-related goals, such as retention and attraction? Build a Smart Design Programs should be designed with an understanding of competitor offerings but also with the employer and employee perspective in mind, including cost requirements and employee demographics. Regulatory requirements must also be taken into account. Use data as evidence to support the process of building an effective design. Determine Structure and Financing Once a smart design has been pinned down, how do you effectively deliver the plan? Think through the best structure and platform to deliver your value proposition. This doesn’t have to be via a fancy portal. Where they make sense to promote and showcase the value of the program, you can use existing technology platforms with help from a partner who understands how to maximize employee experience. One of the realities in Asia is that vendor capabilities are limited, so selecting a partner that understands your business and can grow with you into the future is crucial. The cost of the program is also important in this era of increasing cost of care and double-digit inflation. Thinking through the optimal financing approach (for example, self-funded) should not be overlooked. Develop Unique Branding and Communications Unique branding and communications are crucial for differentiating your plan and establishing an emotional connection with employees. Look to differentiate yourself as an employer via benefits that are more than just medical- and protection-related. Consider the entire benefits spectrum and how benefits are delivered and branded. Communication should be simple, targeted and deployed frequently via multiple channels. Ultimately, employees cannot appreciate and understand something they know nothing about, which is why communication is just as important as design. Despite common perception, implementing a flexible benefits program can be simple, easy to administer and even used as a cost-containment strategy if managed properly. But unique benefits programs also lend another, arguably greater, advantage — differentiation and a way to connect with your employees. To attract the best talent — a necessary strategy as Asia becomes a main player on the world economic stage — organizations have to expand their packages beyond compensation and a basic benefits offering.   1 https://www.marsh.com/ae/en/services/employee-health-benefits.html

In order to attract and retain top talent, organizations need to offer benefits programs that suit individual needs and life stages in addition to providing transparency and portability. “Compensation and benefits” is one of the most criticized expense items in the business world. At the same time, it’s one of the most important for reaching business results. This leaves HR with the quandary of managing total rewards budgets in order to achieve high employee satisfaction, low turnover and high productivity, all while holding down costs. At any company, the ultimate goal of total rewards management — the sum of cash rewards (salary) and in-kind rewards (benefits) — is to ensure that employees take more ownership of their work in order to improve service quality, customer satisfaction, productivity and efficiency. Benefits are an important piece of the equation. According to the results of Mercer’s 2016 Total Remuneration Survey in Turkey, in which hundreds of companies participate each year, benefits constitute 10%–15% of the total rewards package of analyst and expert-level positions. At the level of manager and director, benefits constitute 15%–20% of the total rewards package in Turkey. Benefits are one of the most visible, and thus most criticized, parts of the package. Employees question and compare their benefits packages and use them as leverage to negotiate with their employers. Moreover, recent surveys reveal that employee awareness of benefits is lacking. Companies need ways to better communicate their benefits programs, tailor their benefits to their own demographic needs, meet diversified employee requirements and define benefits strategies that resonate with employees. Benefits programs change from country to country with different labor laws, social security programs and cultural and demographic factors. But benefits are not just a legal requirement: they’re also a way of effectively managing employment costs, improving service and attracting talent. When we look at companies in the East and West, we see a shared need for flexibility in benefits offerings in the digital age. Flexibility allows companies to strategically allocate their benefits budget toward initiatives that directly contribute to a more productive, happy and healthy workforce. Are your benefits flexible? An employee benefits checklist • Our benefits respond to changes in employee position, marital status and income level. • We communicate our benefits in a summary of the employee’s total rewards package, as well as changes to our benefits. • We review and change our policies as our business and demographic needs change. • We allow employees to form their own benefits packages in line with their needs. • We give employees the opportunity to exchange benefits while keeping within the allocated budget. • We give employees access to discounted prices, tax advantages and national security premium exemptions to help keep benefits affordable. According to Mercer’s Total Remuneration Survey, the countries where flexible benefits programs are most prevalent are the UK, the US, Spain, Sweden, Norway, Denmark, China, India and Singapore. In Western economies, companies implement flexible benefits programs in order to provide more options, share costs and help employees better understand the value of offered benefits. In Eastern economies, flexible benefits programs allow companies to differentiate themselves in a developing industry and growing economy. How Adding Flexibility Helps Companies Stay Cost Neutral   Due to political and economic concerns in Turkey over the past five years, companies have generally preferred to remain reactive in terms of benefits prevalence. They’re now looking for ways to promote diversity and provide options to employees while staying within allocated budgets. The prevalence level of flexible benefits rose from 11% in 2013 to 31% in 2015 in Turkey. With these programs, leading companies are starting to provide new benefits to their employees and offer the opportunity to exchange benefits. Challenger companies are also considering flexible benefits programs as a way of competing with the pioneers. Moving to a flexible benefits program is not easy. It involves redesigning the benefits package, complete with professional employee communications. To justify such a large-scale HR project, the program must deliver on containing costs and increasing employee satisfaction. Let’s look at an example of a company that provided more choice while staying cost-neutral. The figures are in Turkish lira and our employee is married. The value of the benefits package is 11,417 lira, with a gross cost to the company of 12,204 lira (after the national social security premium the employer must pay). With the flex structure, the employee gets new benefits: a shopping voucher (with a 5% discount), a DC pension plan and a medical checkup — a service that is not included in Turkish medical plans. The employee also has the option to increase medical plan coverage by exchanging current benefits (transportation allowance, meal voucher and clothing voucher). By exchanging benefits, employees are able to benefit not only from discounted prices but also from the tax advantages that come with DC and medical plans. When we compare the total net value of the employee’s previous benefits design with the new design, we see that the employee is now realizing an extra 437 lira in benefits value. By using a flexible structure, the employer stays cost-neutral while employees can personalize or even increase their level of benefits. The Future of Flexible Benefits   A growing number of employees today expect their employers to use their purchasing power to offer them discounted prices and tax-advantage opportunities. This is especially evident in markets where the GDP growth rate is shrinking and the pressure on wage increases is very high (due to rising inflation), including Turkey, Brazil, South Africa, Mexico and Poland. Companies in these markets are increasingly asking their employees what they want and trying to provide them with a wide range of options to support attraction and retention. These organizations need to find effective ways to manage rewards while meeting the diverse needs of employees. Flexible benefits programs are a way of offering these options while staying cost-neutral, increasing engagement and promoting employee accountability.