Alternative Benefits are the Next Frontier

Alternative Benefits are the Next Frontier

Our Thinking / Health / Fast Focus: Trends and Insights Redefining the Benefits World

Alternative benefits are the next frontier
Calendar12 December 2018

Talk about a Christmas bonus: in December 2017 -- during the height of the Bitcoin rally -- GMO Internet, a tech company in Japan, made headlines when they gave their employees the option of taking part of their salaries in Bitcoin. (Up to 100,000 yen, or about $890 a year.)

While offering cryptocurrency as compensation may seem an outlier, the idea behind it is not. Offering workers benefits that fit their lives and interests, instead of a one-size-fits-all benefits package, is a natural evolution in the global workforce.

In 2018, flexi work and being conscious of work/life balance is becoming the norm. A company that wouldn’t take an employee’s needs --familial and otherwise -- into consideration might seem out of touch.

But as much as the structure of the work day has evolved, benefits haven’t. In a competitive market, where jobs and salaries might be equal, benefits could be the deciding factor for some, if they had to choose between employers.

Companies recognize this need for flexibility, with 40% of employers looking to review their employee benefit programs. 47% specifically plan to review flexible benefits and 36% flexible working and leave (APAC Benefits snap poll 2017)

What alternative benefits look like

Savvy employers know that in order to attract a diverse workforce, their offerings must be innovative. The typical modern workplace includes people who telecommute, who have flexi hours, have a growing contingent workforce and people who plan on taking sabbaticals. Supporting this new normal means having a benefits philosophy and practice that embraces these changes.

As a result - Employers are considering offering choice in benefits across the spectrum of wellbeing – physical, emotional, social and financial in an effort to “reach” their ever changing workforce and continue to connect with their employees. There’s been a rise in features such as personal innovation days, mental health days and themed Fridays, in an effort to keep workers engaged.

Employees appreciate choice and the ability to adapt their total rewards and benefits according to the own individual circumstances. For example -  someone with a family, that could mean more robust health coverage or support in respect of financial advice, wealth creation and planning for the future. For an employee who’s young and single, they may not feel that extensive medical coverage is necessary and would prefer flexibility around time off, financial advice in relation to debt management or support for further education and learning.

Education is needed

As trendy as offering bonuses in cryptocurrency is, employees will need guidance. Education is critical to ensure they understand the impact of the choices they make, especially when it comes to financial decisions. For example, if someone is risk averse, then opting to choose to receive a percentage of their salary in Bitcoin may not be the right decision.

Education is also needed when employees choose a la carte benefits. In the past, research has shown that even when workers have the option to customize their benefits, they tended to be more conservative when the options weren’t fully explained.

Offering data such as what their peers with a similar profile to them have chosen in terms of benefits, or external data sources relating to cost of medical care could help workers make informed decisions. By broadening options and offering insights, employees will be able to make the best of any benefit structure.