Q3 2015 « Human Resources Hong Kong «
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News from humanresourcesonline.net
SPONSORED RECRUIT ADVICE HOW TO THIS ARTICLE WAS BROUGHT TO YOU BY MERCER MARSH BENEFITS TM
A QUICK FIX TO EMPLOYEE BENEFIT COSTS IN HONG KONG Across Asia, employers are experiencing health and benefits programme cost increases as high as 45% annually in some markets, impacted by high inflation, even higher medical cost inflation and a corresponding impact on health and benefits premium increases. With health and benefits becoming an increasing portion of payroll costs across the region, it’s an expense that employers can no longer afford to ignore. Many employers are also balancing differing employee demands that come with having a multigenerational workforce, and are managing other challenges such as an increasing incidence in chronic disease and changing local healthcare regulations. Despite a backdrop of increasing costs, a high percentage of employers across Asia are not investing aggressively enough in health management programmes, failing to understand the root health causes, and not yet drawing a meaningful parallel between employee health and overall operating costs. Given such a complex operating environment and multi-pronged cost pressures, are there any “quick fixes” that employers can institute to manage healthcare programme costs in the short-term, and what actions can employers undertake to ensure the long-term sustainability of their programmes? How does Hong Kong fare and what are the unique local cost drivers and opportunities for employers to tackle these challenges? Healthcare expenditures in Hong Kong as a percentage of GDP are expected to increase from 5% in 2010 to 7% in 20201, mainly due to rapid medical inflation (which ranged between 8% and 10% in 2013 and 2014).2 Other factors such as unhealthy lifestyles, advancements in medical technology, increasing healthcare utilisation, and an ageing population are also placing upward pressure on employers’ medical costs. The majority of the Hong Kong citizens surveyed reported experiencing at least one sub-optimal health symptom, and nearly two-thirds stated their poor health symptoms affected their work performance or family life.3 Poor or sub-optimal health conditions lead to higher use of employer-sponsored medical benefits and an increase in absenteeism, which in turn leads to rising employer medical costs and lower levels of productivity. A closer look at the key cost drivers related to the Hong Kong workforce reveal that lifestyle changes leading to chronic diseases and lack of transparency in the private healthcare sector have the biggest impact on benefit programme costs. Let’s take a look why. KEY COST DRIVERS Lifestyles leading to chronic disease In 2012, 72% of the total registered deaths in Hong Kong were attributed to five major preventable non-communicable diseases: cancer, pneumonia, heart disease, cerebrovascular diseases and respiratory diseases.4 This is likely due to behavioural factors such as an uncontrolled diet, smoking, and lack of exercise; biomedical factors such as obesity, hypertension, and sub-optimal sugar and lipid profiles; and work-related factors such as stress, long working hours, and a sedentary lifestyle. Another survey revealed that 72% of residents did not do any kind of physical activity, 82% had an unbalanced diet, and 26% did not get adequate sleep on a regular basis.5
Lack of transparency in the private healthcare sector Fees in the private sector are not regulated and there are no requirements for private healthcare providers to disclose their fees and charges. Increasing outpatient and inpatient hospital costs and lack of price transparency make it difficult to ascertain up front medical costs. In an outpatient setting, private doctors provide both consultation fees and drug dispensary services within the same clinic, which results in a lack of transparency around drug costs. Opportunities for employers In this competitive talent environment, employers need to devise creative ways to contain costs and stay competitive to attract and retain top performers. Understanding the employee health profile in order to tailor programmes, providing choices to optimise investment and improve employee perception of benefits, and understanding underlying medical cost drivers are some key ways to design an appropriate employee benefits strategy. For greater insights into immediate (quick) and sustainable (longer-term) opportunities for employers to address rising benefit programme costs in Hong Kong and other countries in the region log on to http://bit.ly/MMBQuickFix. 1
Hong Kong Domestic Accounts. Hong Kong Department of Health. Behavioural Risk Factor Survey, April 2012. 3 Hong Kong Department of Health. Health Facts of Hong Kong 2013 Edition, 2013. 4 Hong Kong Department of Health. Health Facts of Hong Kong 2013 Edition, 2013. 5 Hong Kong Department of Health. Behavioural Risk Factor Survey, April 2012. 2
This article is contributed by Arthur Lee, Mercer Marsh Benefits Business Leader – Hong Kong
Arthur Lee, Mercer Marsh Benefits Business Leader – Hong Kong He can be reached at +852 3476 3788, or Arthur.lee@mercer.com
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WORK LIFE » People 人物
SpacialAwareness
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» Human Resources Hong Kong » Q3 2015
YES, we recruit there. Your single point of contact for all of your hiring needs globally
www.npaworldwideworks.com Q3 2015 ÂŤ Human Resources Hong Kong ÂŤ
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People 人物 WORK LIFE
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WHITE PAPER » Leadership 領導才能
The top three most difficult positions to fill in Hong Kong 香港最難招聘的職位的頭三甲
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Sales representatives
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Engineers
3
IT personnel
營銷代表
工程師 資訊科技人才
CHINESE EMPLOYEES PUT TRUST IN THEIR TOP LEADERS 中國僱員對管理層充滿信心
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SPONSORED RECRUIT ADVICE HOW TO THIS ARTICLE WAS BROUGHT TO YOU BY CXA
REVOLUTIONISING CORPORATE BENEFITS AND WELLNESS PROGRAMMES In this digital age, the amount of data embedded within electronics and wearable devices contains a great amount of information that can be analysed to provide insights into an individual’s health behaviour. Firms seeking to improve employee health and engagement should leverage on these to optimise their insurance and wellness programmes. When it comes to the health and wellness needs of employees, we’ve found the following issues are consistent with HR professionals, irrespective of industry: • Employee health is worsening. • Employees do not understand their insurance plan, so they do not value it. • Insurance premiums are rising rapidly. • HR would like to implement wellness programmes, but lack data to justify the budget. • Vendor management is too time-consuming.
spend time on issues that matter. We now live in a data-centric world where technological advances have enabled cloud-based applications to drive intelligent decision-making in most industries. The corporate health and insurance industry needs to adapt accordingly or risk becoming irrelevant. This article was contributed by John Lee, head of business development for CXA Hong Kong. Before CXA, Lee held regional senior HR roles with BlackRock, Bank of America Merrill Lynch and Nomura.
Vendors such as insurance brokers and healthcare providers have not made the necessary advances to reduce the administrative burden for their clients nor leveraged available data to bring about cost-effectiveness. Some solutions to the above issues include: SHIFT FROM TREATMENT TO PREVENTION To encourage healthy behaviour, companies should allow employees to shift their insurance entitlement from treatment to prevention. Regular health risk assessments and screenings should be encouraged to increase awareness, and the resultant health data can be analysed by employers to develop targeted and cost-efficient wellness and rewards programmes.
This article is contributed by John Lee, head of business development, CXA Hong Kong
CONTROL RISING HEALTHCARE COSTS Insurance premiums are doubling every three to five years due to healthcare inflation and worsening employee health. Transitioning from a defined benefits to a defined contribution model helps companies avoid the full burden of medical inflation and keeps healthcare spend sustainable. EMBRACE PERSONALISED BENEFITS Young and fit individuals have very different needs from older individuals with chronic diseases. Married employees with dependents have different priorities from their single peers. Allowing employees the flexibility to customise their benefits and free up unused insurance dollars to purchase wellness benefits they value such as gym memberships will go a long way in better talent retention. GO DIGITAL Employees want claims to be quick and painless, as do HR and employers. Eliminate paper by taking the claims process digital: scan, send and track all claims online or via a smartphone app. ENGAGE A BENEFITS PROVIDER An innovative vendor should provide a one-stop shop to connect your employees with insurers, health screeners and all other vendors so HR and employers can
To discuss and know more, contact www.cxagroup.com info.hk@cxagroup.com. Unit 2901, 148 Electric Road, North Point, Hong Kong.
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PROFILE » Alex Wong
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Alex Wong « PROFILE
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Relocation & mobility 調配及流動 « FEATURE
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FEATURE » Relocation & mobility 調配及流動
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Relocation & mobility 調配及流動 « FEATURE
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FEATURE » Relocation & mobility 調配及流動
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FEATURE » Education 教育
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Education 教育 « FEATURE
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FEATURE » Talent Management 人才管理
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Talent Management 人才管理 « FEATURE
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FEATURE » Talent Management 人才管理
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Talent Management 人才管理 « FEATURE
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FEATURE » Talent Management 人才管理
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HONG KONG: 15 OCTOBER 2015 KUALA LUMPUR: 29 OCTOBER 2015
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OPINION » Upwardly mobile 向上流動
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Upwardly mobile 向上流動 « OPINION
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OPINION » People issues 人事問題
GEMMA GIL Managing director and head of HR ColorWash Gemma Gil 董事總經理兼人力資 源主管 ColorWash
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OPINION » Unconventional wisdom 不一樣的智慧
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Learning & development 學習與發展 « OPINION
Ringing the Belle on training Field attachment, interactive activities and training are the three pillars of learning at this retailer.
合適培訓 現場實習（field attachment）、互動活動（interactive activities）及培訓（trainings），是百麗國際培 訓理念的三大核心價值。
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CAREERS » Personal development 個人發展
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Pick P of o the quarter qu
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LAST WORD
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