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• The increasing use of flexible benefits by employers in Singapore is effective in attracting and retaining talent.
• Using the segmentation of flex to target different demographics is increasingly in evidence.
• Extending international staff share schemes for expatriate workers is generally trouble-free in Singapore.
• Economic factors, such as rising inflation, are driving up the value of employee benefits.
Flexible benefits and share schemes are popular in Singapore, but there are concerns over inflation, says Alison Coleman
High standards of living, low unemployment and the kudos of being one of the world’s fastest-growing financial centres have made Singapore a popular destination for workers looking to add international colour to their CV. On top of attractive salaries and career development opportunities, they are also being lured by an increasingly innovative approach to employee benefits packages.
This is defined by a steady rise in flexible benefits, initiated several years ago by organisations in the financial sector, but increasingly offered in other sectors as employers wage war for talent. According to the Mercer 2010 Talent Retention Survey, published in June 2010, implementing flex that offers staff choice is seen as the top benefits strategy for staff retention and satisfaction.
Royston Tan, Singapore business leader of Mercer’s health and benefits business, says: “Organisations are expecting talent management to grow in importance, with increasing competition for key talent over the next three to five years. Coupled with a diverse workforce with employees at different life stages and a rapidly ageing population, flexible benefits are gaining strong interest among employers as they strive to provide more choice and recognition.”
Employers are also becoming more innovative in how they provide perks. Victor Chan, regional general manager, Singapore and Association of South-East Asian Nations (ASEAN) for Hay Group’s Reward Information Services, says: “As well as implementing global benefits programmes, multinationals in Singapore are starting to factor in employee demographics and cater to the needs of different groups, like generations X and Y and the baby boomers.
Flexible benefits plans can be used to deliver benefits such as extra holiday, childcare and eldercare.”
In view of Singapore’s relatively low personal taxation rates, tax issues are not a key driver of benefits provision, while legislative requirements are also fairly light.
Organisations that deploy expatriate staff to Singapore and offer international share schemes will find a well-established system in place. Sonia Gilbert, a partner at law firm Clifford Chance, says: “It is a popular place for operating share schemes, and anyone from the UK or Europe should have no difficulty extending their share plan.”
But one factor causing concern is rising inflation. According to Hay Group’s survey Rising costs, rising expectations, which polled 500 Singapore-based firms this March, questions are being raised over how organisations will make provisions to deal with inflation.
Chan adds: “A quarter of organisations surveyed have co-ordinated measures to diffuse the effects of inflation. Of these, 46% considered giving staff salary supplements in one-off payments, taking inflation into account in the annual increment, increasing the annual increment budget and offering a more aggressive salary increment range.”
Other assistance offered to staff includes supermarket vouchers, subsidised or free meals and subsidised transport.
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