14 September 2017

Hong Kong, Hong Kong

Increasing number of companies in Hong Kong to provide flexible benefits, according to latest Mercer Marsh Benefits survey

  • 88% of Hong Kong employers concerned about rising medical costs
  • 28% of Hong Kong employers planned to provide flexible benefits in 2016, more than double the number of employees in 2015

According to “The Hong Kong Employee Health and Benefits Survey 2016” conducted by Mercer Marsh Benefits (MMB), a partnership between global professional services firms, Mercer and Marsh, the number of companies in Hong Kong that is interested in adopting flexible benefits increased from 13% in 2015 to 28% in 2016. When asked about the reasons for implementing flexible benefits programs, 88% said they are responding to diverse workforce needs and values, while 75% said it helps to remain competitive in the marketplace and improve employee engagement.

Other reasons include maximizing the value of existing benefits spend, increasing employees’ appreciation of their benefits, supporting a total rewards program, controlling how much the company contributes to the cost of benefits and helping with staff retention and recruitment.

“We are glad to see that there was an uptrend for companies in Hong Kong to adopt flexible benefits. Seventy-five percent of respondents who provided choice to employees in their benefits programs seek employees’ opinions when designing the programs. This reflects that companies would like to design programs that are most suitable to employees by considering their needs and preferences”, said Eva Liu, Principal and Regional Consultant, Mercer Marsh Benefits. “Medical (38%), dental (38%) and wellness programs (38%) were the most popular flexible benefits used by employees. This highlights the importance of medical and dental coverage as well as overall health management to employees.”

Of companies who did not currently provide flexible programs for their employees, 28% intended to offer such choices within the next five years, while 55% were uncertain about introducing such plans.

“For employers that offer employee choice programs, the main challenges faced during implementation are cost and demonstrating return on investment. Other challenges include complexity of administration and resource constraints,” added Liu. “However, companies will need to overcome these challenges to adopt these flexible programs to engage, retain and respond to their employees.”

Employers concerned about rising medical costs

Eighty-eight percent of Hong Kong employers are concerned about rising medical costs. Most of the companies bear full premium costs for employee benefits for both medical and risk. Compared to 2015, the costs of both medical and risk benefits increased as a percentage of annual payroll.

With regard to rising medical costs, 55% of companies have adopted cost-containment measures. The most popular measure adopted by employers is implementation of a panel arrangement (34% from 32% in 2015), followed by providing wellness programs. An increased percentage of respondents implemented a cost-sharing arrangement with employees, while there was a significant drop in the percentage of respondents (37% from 47% in 2015) adopting remarketing.

A total of 762 companies from 27 industries covering more than 167,000 employees participated in this survey, which Mercer has undertaken annually since 1987. The survey provides a snapshot of the employee benefits in 2016 and provides a comparative analysis of benefits trends over the past few years.


For more information about the report click here.


Notes for Editors

Survey Methodology

Data was collected from the following sources:

  • Insurance policies and handbooks: Survey data was extracted from insurance policies, employee benefits handbooks, and other documents containing benefits details and associated reimbursement limits from the database of Mercer’s and Marsh’s existing and prospective clients.
  • Online questionnaire: A total of 74 employers responded to the online questionnaire on benefits costs and cost management, perception of the service received from providers and their philosophy toward employee benefits.



About Mercer Marsh Benefits

Mercer Marsh Benefits provides clients with a single source for managing the costs, people risks, and complexities of employee benefits. The network is a combination of Mercer and Marsh local offices around the world, plus country correspondents who have been selected based on specific criteria. Our benefits professionals located in 135 countries and servicing clients in more than 150 countries, are deeply knowledgeable about their local markets. Through our locally established businesses, we have a unique common platform which allows us to serve clients with global consistency and locally unique solutions. Mercer and Marsh are two of the Marsh & McLennan Companies, together with Guy Carpenter and Oliver Wyman