Amidst the job losses in big tech and the repercussions of tech winter, people are still employed, businesses are still running and for most of us, it is business as usual. Not every business has been impacted by the aforementioned issues, but they still have to deal with managing their current employees and dealing with an ever-evolving workforce.

This has always been challenging and requires businesses to relook at their processes and employee retention plans regularly. This is why, when Mednefits, an employee flexible benefits platform, recently announced the launch of their 2022 Employee Benefits Trends e-book we wanted to find out more about the current situation for businesses.

We got the chance to speak to Hadiyanto Wibawa, Co-Founder & Country Manager for the Singapore HQ of Mednefits to find out how companies are handling their employees and keeping up with employee benefit changes.

Why Cake DeFi sees strong potential for the Southeast Asian market

Mednefits has grown to provide employee benefits to over 500 companies in the region with companies 7-11 and Carro as their clients. They have also built up a network of over 3,000 providers in Singapore and Malaysia.

Their recent survey highlights some key aspects of the employee benefits industry. The e-book contains the results and analysis from a survey conducted on 200 HR decision-makers spread evenly across Singapore and Malaysia. Additionally, the e-book shares insights into the challenges of administering employee medical benefits, and the future of the industry. 

Mednefits co-founders
Mednefits co-founders

Could you give us some insight into the drivers pushing companies towards Flexi benefits?

The Great resignation phenomenon where companies struggle to retain employees and attract new talents is one of the biggest drivers in pushing companies towards a Flexi-benefit model. This is when topics surrounding employee benefits, engagement and general welfare began to surface and became the mainstay in discussions between HR personnel and bosses. 

There has also been a significant shift in employees’ needs, with a preference for non-medical needs on top of just basic hospitalisation and GP coverage. This alludes to the inherent limitation of the traditional benefits model which is evidently unable to keep up with the changing demands of today’s workforce. Some problems which HRs are beginning to see in the traditional benefits model include: 

  • Lack of real-time visibility on benefits utilisation by employees which results in being unable to derive actionable insights 
  • Unable to customise benefits offerings to cater to the varying demographic needs (baby boomers vs millennials) of employees, different employment types (full-time vs part-time) or positions (director vs managers) within the company 
  • Indirectly encouraging people to see the doctor more frequently and take MCs

Additionally, another perspective embraced by employers is that with the rising cost of healthcare, it is crucial to promote a sense of personal responsibility. Rather than implementing capping limitations (i.e. co-payment or cap per visit), an innovative approach will be the use of a flexible benefits model. In this model, every employee is given a fixed amount of dollars to spend within a year. However, each employee gets the autonomy in deciding how they want to fully utilise the amount as they deem fit. Above all, this would foster a deeper sense of appreciation by employees over the long-term and are more likely to be satisfied with the company’s benefits. 

COVID led to a lot of conversation around employee benefits and engagement (at least in the media), has there been a tangible change to employee benefits over the last couple of years in Singapore and Malaysia?

Prior to COVID, companies were largely cost-conscious and preferred to stick with existing methods of employee benefits – which mainly encompasses medical-related benefits. While tedious, they are comfortable with the status quo of administering and tracking their benefits-related claims manually. However, post-pandemic, as the economy gradually began opening up, we are starting to observe more companies re-looking into their existing benefits plans and finding ways to restructure the benefits either to reduce corporate healthcare costs or to better attract and retain talents. Covid seemed to have reshaped the way people go about their work as companies are more motivated to digitise their operations with the long-term goal of being time and cost-effective. As such, many have looked towards technology and automation in order to save costs. 

What are some of the trends you are seeing in the employee benefits markets in the region?

There is an increase in demand by corporates for onsite events, as we’ve seen spending increase by 2 folds within the last 6 months. The proportion of SMEs viewing flexible benefits as a way to generate greater employee engagement is at 49%, which is not very far off from the 60% we see in MNCs; and this shows a pivot in mindset away from just viewing employee benefits as a means of being compliant with mandatory medical coverage. Naturally, they are increasing the type of benefits provided to employees. While the majority of companies provide employee medical benefits using insurance (65%), it is also promising to find that the top priorities for organisations in 2022 include understanding employees’ needs, finding creative ways to reduce costs and measuring the effectiveness of current benefits. Overall, we see that the status quo is being disrupted and organisations are recognising changes and are willing to adapt accordingly.

Could you share some of the common factors that prevent companies from adopting this form of employee benefits?

The top 3 factors that ranked number 1 in preventing companies from adopting a flexi-benefits model are: 1) unsure if employees will appreciate flexible benefits or that it may not be applicable/relevant in a particular industry (28%), 2) too much friction within the company to make changes (22%), and 3) unsure what tools are available to implement flexible benefits (20%). 

On top of these factors, let’s not forget about the typical misconceptions that our clients typically have. Firstly, the idea that “more benefits = more monetary and administrative costs”. The crux here is not so much of allowing your costs to spiral out of control and more efficiently allocating the fixed budget (entitlement dollars) on various benefits categories. Secondly, it is common to treat inpatient and outpatient-related benefits the same because it has traditionally been lumped and packaged together by insurers under what is called a “Corporate Healthcare Plan”. To debunk this misconception, we often tell our clients that the purpose of purchasing an insurance plan is to use a small sum of money (premiums) to cover a huge financial risk. This is where it makes financial sense for a company to put in place corporate hospitalisation plans to insure their employees. The same logic, however, does not apply to outpatient-related needs, whereby a corporate is essentially billed on a pay-per-use, dollar-for-dollar basis. In this instance, it hardly makes financial sense to purchase outpatient coverage under an insurance plan. 

Last but not least, the Southeast Asia culture and mentality are still relatively more conservative – in which most companies are still afraid of benefits misuse or abuse by employees. This perception of the minority holds companies back as they wish to transition into a more flexible and dynamic type of benefits model.  

How do you overcome reluctance to change?

Shift in mindset by starting small – including conducting pilot tests on a small group of employees. If the results turn out to be favourable, get these employees to be advocates of change. Look around for successful case studies that show how the workload of HR teams can be reduced or even better managed via the adoption of a digital benefits platform which comes with real-time tracking and automation. Switching to a flexi-benefits model, not only gives the company the flexibility to customise their benefits, but employees will also be able to take control of their own benefits utilisation.

What’s next for Mednefits?

In the latest news, Mednefits received our ISO 27001 certification and is ready to scale and serve corporates even more securely. Our mission is to build the future employee benefits infrastructure and to really focus on becoming the flexible benefits platform of choice for companies worldwide. With a presence in both Singapore and Malaysia markets, we will be looking to expand our footprint into the neighbouring ASEAN countries through strategic partnerships and plans over the next year.