8TH ANNUAL EMPLOYEE
HEALTH AND BENEFITS STUDY
EMPLOYEE CHOICE IN BENEFITS - INSIGHTS FROM INDIA &
ASIA
INTRODUCTION
EMPLOYEE CHOICE IN BENEFITS - INSIGHTS FROM
INDIA AND ASIA
The IMF and the World Bank are forecasting a 6.4% growth rate for India in 2015. A buoyant economy
typically translates into a buoyant employment market. With a diverse workforce spanning millennial on
one end and baby boomers at the other, corporate India has realized that compensation packages alone
are insufficient to win the war for talent acquisition and retention. It is not enough to provide rudimentary
health coverage and benefits, but there is now an inherent benefits need to re-evaluate standard benefit
offerings into attractive and needs based packages given the diversity and the demands of the workforce.
Today, health and benefits have moved from the exclusive realm of the HR department to the boardroom
where CXOs are actively involved in deciding on the benefits strategy in view of the greater People
strategy.
Our previous year’s 7th Annual Employee Health and Benefits (EH&B) Study focussed on medical
insurance cost and its key drivers. The current Survey findings revealed that cost remained a major
influencing factor for most organizations. The attempt to find a balance between economy, price and
competitive benefits persists, and with double-digit medical inflation in most geographies in Asia, a
similar trend is likely to continue in India and alter how we perceive benefits and their value. With a focus
on long-term sustainability, the key challenge is to offer benefits packages that are well differentiated,
comprehensive and competitive in terms of cost. The Indian insurance sector has reciprocated by opening
up to newer benefit plan designs and offering more choice to the consumer. Additionally, as per the
employee survey part of Marsh’s 6th Annual Employee Health and Benefits Study, 62% of employees were
not satisfied with benefits provided to them by their employer and 60% of surveyed employees said that
they would like to build their own benefits package. This trend is gathering momentum and employee
choice in benefits is becoming key in providing competitive benefits.
Our latest Study, the 8th Annual Employee Health and Benefits Study outlines the drivers, challenges and
strategies impacting employers in the area of choice in benefits across India and draws parallels against its
Asian counterparts through the responses received in the Mercer Marsh Benefits 2013 Asia Total Health
and Choice in Benefits Survey and the Marsh India 2014 Employee Health and Benefits (EH&B) Survey.
© 2015 Marsh LLC.
38th Annual Employee Health and Benefits Study
ABOUT THE
SURVEY
The 8th Annual Employee Health and Benefits Study compares employer responses from the following two
surveys:
Marsh India 2014 Employee Health and Benefit Survey, received responses from 382 organizations
across various industry segments covering 777,714 number of employees. The Mercer Marsh Benefits
2013 Asia Total Health and Choice in Benefits Survey included responses from 1,035 unique
organizations across 12 countries in Asia. Participating countries included: China, Hong Kong, India,
Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan, Thailand and Vietnam.
INDUSTRY SECTOR
Marsh India 2014 Employee Health and Benefit
Survey
Mercer Marsh Benefits 2013 Asia Total Health and
Choice in Benefits Survey
11%
2%
1%
5%
1%
1%
4%
9%
1%
15%
7%
7%
10%
4%
3%
3%
2%
5%
18%
10%
3%
16%
21%
8%
7%
1% 5%
6%
Manufaturing
Advertising & Media
Automobile
BioTech/Pharma/
Research
BPO/KPO
Consulting
Consumer Durables
Education
Engineering
FMCG
Hospitality
IT/ITES
Logistics
Manufacturing
Media&Entertainment
Others
Petro & Chemicals
Power & Energy
Real Estate & Infrastructure
Retail
Banking & Financial Services
Hi-Tech and Technology
BPO/Call Center
Hospitality and Real Estate
Pharmaceutical
Automative
6%
3%
3%
3%
Professional and other services
Health care and life sciences
Financial Services
Energy and chemical
Retail and FMCG
Others
© 2015 Marsh LLC.4
8th Annual Employee Health and Benefits Study
NUMBER OF EMPLOYEES
Marsh India 2014 Employee Health and Benefit
Survey
Mercer Marsh Benefits 2013 Asia Total Health and
Choice in Benefits Survey
19%
20%
48%
56%
25%
32%
Above 2500
501 to 2500
Below 500
Above 2500
501 to 2500
Below 500
© 2015 Marsh LLC.5
8th Annual Employee Health and Benefits Study
EXECUTIVE
SUMMARY
A good compensation package is not enough to attract and retain the modern day workforce. In an
emerging trend that was first identified in the 6th Annual Employee Health and Benefits Study, employees
don’t just want a standard health and benefits package but seek options to customise it to suit their need.
As this demand grows, more organizations are considering ways to provide their employees with increased
choice in their benefits package.
As per the Marsh India 2014 Employee Health and Benefit Survey the key drivers governing employee
choice for the employer are:
1. Talent acquisition and retention
2. Employee satisfaction
3. Benefit enhancement
4. Cost management
5. Derive greater value from existing benefits
As per Mercer Marsh Benefits 2013 Asia Total Health and Choice in Benefits Survey, 49% of organizations in
Asia support employee choice. In India that drops to 21% of organizations support offering employee
choice. However, 50% of the employers stated that they are keen to look at employee choice within the
next 3 years. As per the survey, the top constraints for not offering choice are complexity of
administration and the perceived heightened cost of benefits. Within the sample of organizations that
had not previously considered employee choice, 44% voted ‘Yes’ to a spending account and 39% were
favourable towards having standardized flexible plans when presented with simple options such as:
•Voluntary benefits: coverage and services that the employee can purchase with their own money at
discounted prices
•Standardized plans: an off-the-shelf flexible benefits plan that is simple, cost efficient, and easy to
launch and administer
•Spending account: a simple flexible benefits plan that provides a flex budget that can be used for
various non-insurance benefits
With the emerging digital workforce and digital jobs that didn’t exist previously in the past 5 years, a “one
size fits all” employee benefits plan limits organizations from attracting this talent pool who prefers choice
to standardization plus limits, organizations moving from defined benefits to a defined contribution push
co-sharing or co-contribution of the costs with its workforce.
The Marsh India 2014 Employee Health and Benefit Survey Report shows that 18% of the organizations
enable some form of employee choice through voluntary and top up plans and an additional 16% offer
varied benefits focussed around wellness and lifestyle outside the realm of insurance. A choice based plan
typically engages the workforce in a positive way and empowers them with the ability to customize their
benefits that are most relevant to them. Additionally, such a plan can be effective in containing costs while
increasing the perceived value of benefits.
© 2015 Marsh LLC.6
8th Annual Employee Health and Benefits Study
TOP CHOICE OFFERINGS
Mercer Marsh Benefits 2013 Asia Total Health and
Choice in Benefits Survey
Under employee choice, the top most prevalent
benefits in Asia are Medical, Dependent cover, Health
screening and Life cover. In comparison, in India,
Parent cover takes precedence over these benefits
followed by Medical, Health screening, other health
programs and mobile telecommunication.
Medical
81%
Dependent's coverage
72%
Health screening
67%
Life
The prevalence of other lifestyle choices like gym
memberships, travel, childcare, vacation and so on, in
comparison to Asian companies, continues to be low
possibly due to complexity of administration and lack
of availability of suitable partners to implement this.
63%
Critical illness
62%
Accident
60%
Maternity
52%
Dental
46%
Long term disability income
34%
Vision
33%
Health programs (e.g.smoking cessation,
weight management,stress management,wellness)
30%
Parent's medical
29%
Traditional chinese
medicine and consultation
28%
Childcare(e.g.vouchers,
on site nursery)
19%
0%
20%
40%
60%
80%
100%
WAY FORWARD FOR CHOICE IN BENEFITS
Marsh India 2014 Employee Health and Benefits
Survey
Portability
52%
Simplify administration rules and processes
52%
More choices and flexibility
45%
Lower cost
42%
Simplify plan design
40%
Integrate with health and wellness strategy
40%
Include work life options and integrated with these vendors
18%
Employers are also looking at portability, easy
administration and increased flexibility as the way
forward for choice in benefits. 79% of the
organizations stated that they would look at engaging
an external consultant to resolve the challenges they
currently face in offering choice.
Despite the lower adoption of Indian companies
towards choice based benefits in comparison to their
Asian counterparts, companies in India will have to
adapt to keep pace with evolving employee
expectations. Employees are increasingly mobile and
in a digital and global economy and workforce –
comparisons of benefit strategies within industries or
geographies become inevitable. With the right tools
and advice, employers can offer comprehensive and
competitive choice based health and benefits
programs to attract and retain their talent and ensure
long term sustainability.
© 2015 Marsh LLC.7
8th Annual Employee Health and Benefits Study
© 2015 Marsh LLC.9
8th Annual Employee Health and Benefits Study
About Marsh: Marsh, the world’s leading insurance broker and risk advisor, teams with its clients to define, design,
and deliver innovative industry-specific solutions that help them protect their future and thrive. It has over 24,000
colleagues who collaborate to provide advice and transactional capabilities to clients in over 100 countries. Marsh is
a member of Marsh & McLennan Companies, a global professional services firm with 52,000 employees worldwide
and annual revenue exceeding $10 billion, which is also the parent company of Guy Carpenter, the risk and
reinsurance specialist; Mercer, the provider of HR and related financial advice and services; and Oliver Wyman, the
management consultancy. Its stock (ticker symbol: MMC) is listed on the New York, Chicago and London stock
exchanges. Follow Marsh on Twitter @Marsh_Inc.
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