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The Evolution of Employee Benefit Programmes in Asia

Prior to the financial crisis, the “full package” is how we used to refer to the remuneration structure that started an expatriate assignment. This phrase meant that you were not a penny out of pocket for virtually anything – rent, car, healthcare, children’s education, a home-leave flight for the family in business class, electric and able bills, air conditioning and heating bills, or just about any other fixed expense. Employee benefit packages took care of it all. You were provided additional compensation if you accepted a role based in a third world country, also knows as a hardship posting. With every expense covered, expats simply paid for their social life and personal travels. Essentially salary was savings and life was good.

Employees had the expectation that their employer would provide for all treatment and care whilst employed with the company. In all areas which may have represented financial vulnerability for the employee and their family, there was little room for disappointment as this would risk a request to be repatriated home and the expense the company had borne to relocate the family for the role.

The company took care of everything in an effort to entice you abroad.

In 2008, the expatriate package changed very quickly.

As a result of the 2008 financial crisis, the credit crunch ushered in a need for companies to reduce their expense lines in an effort to endure tougher financial times. Employee benefits felt the impact in a big way.

Adding to this, unemployment rates across the Western world were at their highest in decades. Companies operating in Asian markets, including hardship postings, were now sought after jobs. This was a grave departure from ten years earlier when companies had to sweeten the deal considerably to encourage people to make the international move.

Fast forward to today, and again the employee benefit landscape has changed substantially with most expatriate packages being a hybrid or local package. In the case of local packages, benefits match those offered to employees hired locally in country, without any additional benefits to accommodate the fact that you’re living away from your home country. On the other hand, hybrid packages are a blend between the local packages and the more traditional expat benefit offering which may include rental, transport or schooling assistance (typically only 25-50% of these costs are covered).

Compared to the benefit offering from 10+ years ago, it is no wonder that employee turnover is higher than ever.

Today’s basic healthcare packages often leave employees stressed and out of pocket. Many employers aren’t taking into consideration the genuine needs of their employees, which is resulting in disloyalty and poor retention rates. Turnover won’t slow unless we incentivize loyalty to combat it.

Employers can counter this high-turnover and lack of company loyalty by creating attractive reasons to encourage their employees to stay. Having a comprehensive benefits package can be an alluring reason to stay with a company. As an employer this doesn't have to be a painful process or cost you a fortune to get it right.

To find out how Expat Insurance can assist you in creating and implementing an attractive health insurance programme to take care of your people, click here to submit a quick enquiry and we will be in touch within 48 hours.

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