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8/13/2019 13)Practices of Compensation and Benefits in 5
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Practices of Compensation
And Benefits in 5 Countries
Nur Diana Binti Mohamad Rodi
2012771537
BM7001DF
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Compensation and Benefit Trends in:
Australia
United Kingdom
Brazil India
Mexico
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TOP BENEFITS CURRENTLY OFFERED:
1 2 3
Australia Income
protection
Travel
accident
Total
permanent
disability
Brazil Term lifeinsurance
Healthinsurance
Dentalinsurance
India Health
insurance
Critical illness
insurance
Pension
Mexico Life insurance Savings fund Health
insuranceUnited
Kingdom
Pension Private
medical
Life insurance
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COMPENSATION AND BENEFITS PRACTICES
IN AUSTRALIA
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Example is insurance component for productsincluding term life, disability and income
protection.
Employees may purchase additional insurancebenefits if offered, and costs are deducted fromtheir investment account.
Government-provided national health insurance butprivate supplemental health insurance is availableand frequently obtained.
The majority of Australians have not taken steps toaddress their financial security concerns, andownership of financial protection products is quitelow.
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Even though a wide majority of employees (76%)
and a majority of employers (52%) said they weresatisfied with their superannuation fund provider,
few express interest in purchasing additional
financial products and services through their fund.
only 40% of all Australian employees use afinancial professional banker, planner or
insurance agent
half of employers said they are aid employees by
offering financial planning services, including theprovision of personalized advice.
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one-third of Australian employees expressconfidence in their financial management skills,and they can make the right decision on financialmatters.
Employers and superannuation funds stress thevalue of workplace benefits to employees, such as
cost advantages, safety, simplicity andconvenience of voluntary benefits.
Innovative ways to save for retirement should alsobe of great interest to company benefits executivesand workers.
Source: The CIA World Fact Book or The WorldBank
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COMPENSATION AND BENEFITS PRACTICES IN
UNITED KINGDOM
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U.K. employees have broad health care and
some retirement coverage from nationalgovernment programs that are supplemented
by private pensions from employers.
About half of U.K. employers offer executive
benefits to their top management, with private
medical insurance (68%).
only one in five U.K. employees who receive
workplace benefits expressed a desire for a
wider array of voluntary benefits through the
workplace.
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U.K. is moving from a classical pension or
defined benefit system to a definedcontribution system.
Employees understand that there might be an
income difference between the traditional
defined benefit plan from their employer and
the new defined contribution system that they
must actively invest in.
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Employers showed a slight increase in their
willingness to offer general financial planningservices to their employees, though not for
personalized services. But only one in four
workers in the U.K. is even interested in their
employer offering such advice.
Source: 9th Annual Employee Benefits Trends
Study, MetLife, 2011
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BENEFITS OFFERED BY EMPLOYERS
Benefits Percentage (%)
Pension 90
Private medical (PMI) 72
Life assurance 69
Travel insurance 40
Critical illness insurance 30
Personal accident coverage 27
Annuities 7Long-term care insurance 4
Home insurance 3
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COMPENSATION AND BENEFITS PRACTICES
IN BRAZIL
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Employees who owns financial products are more
likely to own them through the workplace. Health insurance, life insurance and dental
insurance are the top products owned.
Of most interest to all Brazilian workers is health
insurance, cited by 90% as the most essentialproduct. This is followed by life insurance, dental
and medical check-ups.
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BENEFITS OFFERED TO EMPLOYEES
Benefits Percentage (%)
Health insurance 90
Life insurance 72
Dental insurance 59Grocery ticket 56
Retirement plan 53
Salary continuation in case of illness 48
Food benefit 43
Health check-up 30
Personal accident insurance 29
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Nearly 70% of employers are interested in providing
benefits that improve the work/life balance of their
workers. Such benefits include job sharing, flexible
working hours and telecommuting.
Employer focus on financial education because With
education about financial planning, employees will have
a better understanding of the products that can leadthem to a more secure retirement.
Since few Brazilian employers offer executive benefits,
companies could consider starting with voluntary
benefits for these key employees since they may have
more financial capacity to pay the costs of the benefits.
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COMPENSATION AND BENEFITS PRACTICES
IN INDIA
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OFFERINGS TO EMPLOYEES BY EMPLOYERS:
Benefits Percentage (%)
Provident fund 76
Bonus 73
Gratuity 56Paid vacation 51
Housing allowance 39
Education loan 22
Company car 11
Maternity allowance 10
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Regional Difference: Adapt Benefits Strategy
Mumbai: Employees in this city are significantly
unprepared for their retirement but are very
interested in receiving retirement advice at work.
Retirement planning may be beneficial for this
market. Delhi: employers are positively inclined toward
benefits, and employees have the highest interest
in receiving financial, benefits and retirement
advice at work. Financial advice based on lifestage may be a good opportunity for this city.
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COMPENSATION AND BENEFITS PRACTICES
IN MEXICO
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Large Potential with Regional Differences
Mexico City: Employees are interested ingetting products through their employer but donot see the advantages of voluntary benefits.So educating employers about the link
between benefits and retention might be agood strategy in Mexico City.
Guadalajara: Employers offer more benefitsthan required by law, and employees are moreinclined to own benefits through work. 90%have no step plan for retirement. So educationwould also work as a strategy in this city.
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Monterrey: Employers tend to offer only
those benefits required by law. Employees inthis city are less confident in making financialdecisions and significantly unprepared fortheir retirement. Retirement planning may be
beneficial for this market.
Leon: Employees tend to own productsthrough work and are positively inclined tovoluntary benefits. They have moderatefinancial concerns, with 60% not prepared forretirement. Education on voluntary benefits
and financial planning could be a door openerin this city.
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More than half of Mexican employers mentionedthat they would like to shift the costs of benefits to
their employees. Employers can focus on financialplanning assistance and voluntary benefits. Thesehave the advantages of providing benefits toemployees without the employer taking on largeadministrative and cost burdens.
Retirement, health insurance during retirement aswell as life and disability insurance are the top linefinancial products of interest to Mexicanemployees. Retirement products with tax benefitsare also growing in this country.
Source: INEGI (Instituto Nacional de Geografa yEstadstica), 2011
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The Potential of Voluntary Benefits
In Brazil, nearly half of all Brazilian employeeswho currently receive workplace benefits said theyare interested in a wider array of voluntary
benefits.
In Australia, the majority of employers are not
convinced that offering voluntary benefits shouldbe part of their strategy. Financial planningservices could be one of these voluntary benefits asonly 36% of Australian male employees and 24%of female employees said they were confident in
making financial decisions. In Mexico, 56% of workers who currently have
workplace benefits said they wanted a widerchoice of voluntary benefits.
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Common Challengesconfronting both multinational companies are:
1. Increasing the productivity of their workers
As the global economy continues to grow this yearand competition for customers rises, companieswill need to refine their benefits strategies to getmore out of their workers.
2. Retaining employees
Companies in all 5 countries should also reviewtheir benefits policies to make sure there is nodisconnect between what they offer and what theirworkers seek
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3. Controlling health and welfare benefits costs:
The continued acceleration of health care costsworldwide presents a challenge that will
require creative, long-term solutions involving
both the public and private sectors.
4. Confronting the retirement issue head on:
Pensions are costing more and people are
living longer, while government funds face
shortfalls.
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RECOMMENDATION
1. Connecting the dots:
Employers across the board need to better
understand the value that benefits can offer in
helping them address their top HR concerns in
this changing global economy.
2. Education:
Employers can stress the value of workplace
benefits to employees.
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