In Singapore’s dynamic business landscape, small and medium-sized enterprises (SMEs), which account for 99% of businesses and 71% of employment in the city-state, are leading the charge in terms of innovation and economic growth. However, as the workforce evolves and employee expectations shift, SMEs must overcome a significant obstacle: how can they attract and retain top talent in an increasingly competitive labor market?
With 70% of Singapore workers attracted to employers offering competitive salaries and benefits, innovative employee benefits have become a key differentiator for SMEs, where a well-designed benefits package can be a powerful tool for talent acquisition and retention. The importance of this cannot be overstated, especially as when we already see a third of employees in Singapore likely to change employers within the next year.
The shifting paradigm of employee benefits
The expectations of employees have undergone a significant transformation, particularly in the post-pandemic era. A recent WTW study revealed that 6 in 10 employers in Asia Pacific are planning or considering revamping their employee value proposition to attract and retain talent.
This shift in perspective has led to a growing trend towards more holistic benefits packages that not only cover financial wellbeing, but also physical and mental wellness – in line with the prevalent expectations for personalized and flexible benefits from today’s workforce.
This preference reflects a broader understanding that employees have diverse priorities. By offering a holistic suite of benefits that can address their varying needs, SMEs can demonstrate that they listen to and support their workforce in meaningful ways.
Moreover, the advantages of optimized workplace benefits extend far beyond just talent retention. They can foster stronger company culture and loyalty, promote work-life balance, and increase workplace productivity e.g. 74% of employees indicated that they would work harder for an employer that provided benefits that supported their individual needs.
In essence, a well-designed benefits package is a confident investment in a company’s most valuable asset – its people.
Challenges of today’s fragmented benefits market
Despite recognizing the importance of comprehensive benefits packages, many SMEs still find themselves struggling within the fragmented benefits market. These businesses then source disparate benefits from multiple providers, leading to increased costs and administrative burdens. This fragmentation creates a significant stress point as they attempt to balance competitive benefits offerings with operational costs, losing sight of the cost of employee turnover, which is about 33% of an employee’s annual salary.
As a result, SMEs are impacted in their attempts to attract and retain top talent, where they find themselves at a disadvantage when competing with larger corporations that can offer more extensive benefits packages. This disparity can make it difficult for SMEs to secure the skilled workforce they need to grow and innovate.
An imperative to innovate: The case for an integrated benefits platform
In response to these challenges, we are witnessing the rise of integrated benefits platforms for SMEs. The market has evolved to offer various approaches to benefits integration – from digital HR platforms with embedded benefits features, to dedicated benefits management systems, to the most mature form in integrated ‘benefits in a box’ platforms that combine insurance, wellness, and lifestyle benefits. These platforms leverage technology to address existing pain points by streamlining HR processes and providing data-driven insights to optimize the allocation and utilization of workplace benefits.
This industry-wide shift towards integrated solutions reflects a deeper understanding of SMEs’ needs. When developing our own all-in-one solution, the approach centred on collaboration, i.e., partnering with a technology startup to combine financial expertise with digital innovation. The goal was to contribute to the growing ecosystem of solutions that simplifies HR processes by offering flexible benefits that are aligned with today’s workforce needs.
It is imperative that the development of such platforms is closely guided by extensive market and end-user insights, ensuring that the final product aligns with the needs of both the SMEs and their employees. Ultimately, the focus on customer-centric innovation is essential to drive better outcomes, making workplace benefits more accessible and valuable for all stakeholders.
Empowering SMEs for the future of workplace benefits
As we look ahead, there’s a growing demand for “non-standard” benefits such as on-demand pay, enhanced mental health support, integration of sustainability into benefits packages, and flexible work arrangements. By adopting such integrated benefits platforms, SMEs can be more adaptable in evolving with shifting employee needs through the considered curation of these alternative benefits.
Given that the solutions and technology are already readily available, SMEs are in a great position to leverage this wave of change and vie for top talent. This means adopting an open-minded, collaborative, and bottom-up consultative approach to developing workplace benefits. SMEs can then ensure that they are delivering truly meaningful and useful benefit offerings for their employees.
The future of employment is here and now, and it demands a new approach to administer employee benefits. For SMEs willing to take that next step, the potential rewards – regarding talent acquisition, retention, and overall business performance – are for the taking. By prioritising their talent pipeline through comprehensive, flexible benefits, SMEs can build a solid foundation for sustained growth in Singapore’s competitive business landscape.