MERCER WEBCAST: BENEFITS TRENDS IN ASIA: A LOOK AT KEY BENEFITS ACROSS INDUSTRIES AND GEOGRAPHIES

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1 WEBCAST: BENEFITS TRENDS IN ASIA: A LOOK AT KEY BENEFITS ACROSS INDUSTRIES AND GEOGRAPHIES Thursday, 31st May pm Singapore Time Questions and Answers Below are some of the questions and answers from the webcast. Questions with similar themes have been combined Please Note that while we have attempted to answer all the questions, some responses may require more detailed explanations or analysis that are better suited to a more consultative approach. Hence, the responses should be used as a guide only. If you would like more details on any benefits, please refer to our Mercer BenefitsMonitor. Should you require further clarification on any of the answers or if you will like to find out more about our survey, please feel free to contact our Benefits Consultants. General 1. What is telecommuting? Telecommuting refers mainly to working away from the office through the use of technology. 2. Are the values shown on the slides based on the respective country s currency? Yes, it is based on local currencies. 3. Are administrative costs included when you mention benefits costs? No, the benefits costs refer to the cost of the actual benefits (e.g. premiums for healthcare, provision of car etc.) without administrative fees or taxes. 4. How should any change in benefits be presented to the employees? A key pillar of success of the benefits program is explaining and communicating the value of benefits to employees that allows them to relate and appreciate it. The communication should engage employees, allow them to understand what they are entitled to and make them feel that the benefits were tailored for them. For more information on how to communicate change to employees, please contact your local consultant. Mercer (Singapore) Pte Ltd ( E)

2 5. Does Mercer have data for locations like Australia, Malaysia, New Zealand, Philippines or Thailand? Yes, Mercer offers benefits information to clients globally on a needs basis. More information can be found in the Mercer BenefitsMonitor if you are interested to find out more about any countries. 6. What should one consider when deciding what kind of benefits to offer, especially in a growing company? It differs per country, although a few important considerations are the regulatory requirements, the cost of the benefits, as well as the perceived value of the benefit to your employees. For more information, please contact your local consultants. Flexible Benefits 7. Can you share what is the list of items under the flexible spending account? The amount shown on the slides is a median from our benefits survey results. Some of the more common items are medical outpatient and specialist, hospital, life and accident insurance, dental, optical, and health screening. More information can be found in Mercer BenefitsMonitor. 8. Will the introduction of flexible benefits reduce company cost? Flexible benefits can be used as an instrument to manage cost in the long run, because the Flex mechanism allows easier sharing of eventual increases in benefits costs. In traditional benefits schemes the employer would automatically bear the cost increase, whereas employees in a Flex set up that wish to receive the same benefits they have chosen under the plan, can be asked to (partially) pay for the benefits. However, start-up of flexible benefits will require some additional funding, particularly in the increased time spent on communication and administration. Companies can consider hiring third parties to support them with this start-up. In order to be successful, employers need to involve employees when designing the Flex plan. They also need to measure the effect of the Flex plan on a regular basis because the demographics (and preference) of their employee base might have changed. 9. Why are flexible benefits more common in Singapore than in other countries? Singapore s economic structure and maturity allows companies to implement flexible benefits relatively easily, and the insurance companies are able to underwrite the risks involved in these policies. In addition, MNCs who have implemented flexible benefits in other regions would want to align their policies globally. Lastly the Singapore government allows certain benefits to be offered without any tax levied to the employee; these benefits are very suitable to be included in a flexible account, rather than providing cash to employees.

3 Leave 10. What are the disadvantages of implementing flexible benefits? It is important that the return on investment is determined upfront, taking into account start-up cost, administration of the plan and the likely utilization rate of the plan by employees. 11. What is the average number of days for annual leave in Singapore? The average number of days for annual leave ranges from 14 to 22 days, depending on the number of completed years of service and position level. 12. In view of the aging population, do you see a rise in family-oriented leave in Singapore? We have not seen trends of companies in Singapore responding to this issue. 13. Is it common for companies in Vietnam to pay cash for unused annual leave? No, less than 10% of the companies do pay for unused annual leave. When they do, the median limit number of days that can be encashed is 11 days. For more information, please contact your local consultant. 14. In India, there is no limit with regards to the duration where leave can be carried forward, is this a regulatory requirement or a common market practice? This is a market practice in India. However, companies are feeling the strain from not having a limit. We believe that these companies will start to move away from this policy. 15. What is the prevalence of sabbatical leave in various countries? Sabbatical leave is not widespread. The incidence is slightly more common in professional services companies. For prevalence on sabbatical and other non-traditional leave, please refer to Mercer BenefitsMonitor. Health & Medical 16. Do you provide data on the market norm for outpatient and dental entitlement per year? Yes, we do have data on this. If you are interested to benchmark medical benefits based on what is currently in the market, you can refer to the respective sections in our benefits survey results. For more information on benchmarking, please contact your local consultant.

4 17. What is the trend towards health club membership in India? Insurance Health club membership is not common in India. The most prevalent program is still health awareness talks and gym memberships. For more information on health benefits, please contact your local consultant. 18. With the rising insurance cost in Singapore, how are companies in the high-tech industry managing it? In general, companies are moving away from providing coverage to employee s parents and are opting to insure healthcare benefits. To learn more about managing the costs for insurance, please contact your local consultant. 19. What is trend in India for accident and term life insurance? Are they combined as a single insurance or separate? It is commonly provided as separate insurances. There are more companies providing for accident insurance than term life insurance. Vehicle Benefits 20. Is the car allowance amount stated in your slides per month or per annum? What does it normally include? The amount stated is based on per month basis. The allowance typically includes running expenses such as petrol, maintenance and repair as well as toll fees or parking. 21. What is the common practice for car ownership in India? Do employees have to share in the cost of the car? Company car is provided to top management on top of guaranteed cash typically. Management and professional employees can opt for the model as per their grade entitlement and request a car of value that is higher than their grade entitlement. The costs incurred by the company for the car are recovered from the employees through payroll deduction. 22. Is transportation allowance a common benefit in Singapore? What is the monthly amount? What is the market practice on transportation allowance The prevalence and amount of transportation allowance differs by industries. More information can be found in Mercer BenefitsMonitor for Singapore.

5 Mobility 23. Is providing international health coverage to employees a common practice? Unfortunately, we do not have data on the prevalence for local employees. However, it is fairly common (more than 50%) for companies to provide the coverage for expats in the region. 24. Do you have any data on relocation support and benefits trend for expats and relocatees? Yes we do, they are covered in our global mobility survey. For more information, please contact your local consultant or Tom Farmer. Non-traditional benefits 25. How does unlimited annual leave work? For companies implementing this, what are the challenges faced and how is cost being contained? Some of the key challenges is gaining buy-in from top management about the value of this benefit, as well as establishing guidelines on the usage of it for both the employee and the manager. 26. How do you provide leave creatively without raising cost? Creative leave options should provide employees with greater flexibility in exercising their leave benefits. Companies can set a threshold on the number of days of leave to provide, and then implement different leave options based on the profile of the employees. For more information on implementation, please contact your local consultant. 27. For individual coaching, do you mean coaching provided by a superior or from an external consultant? In our survey, we did not differentiate between coaching by a superior or from an external consultant. The objective is to allow employees to maximize their performance and be given opportunities to use their knowledge and skills.

6 Contact Information Presenter / Regional Godelieve Kroonenberg godelieve.kroonberg@mercer.com Australia Dylan Ward dylan.ward@mercer.com Bangladesh Aastha Khandelwal aastha.khandelwal@mercer.com China Harrison Tan harrison.tan@mercer.com Hong Kong Joyce Chow joyce.chow@mercer.com India Tanushree Sinha tanushree.sinha@mercer.com Indonesia Evy Kriswandi evy.kriswandi@mercer.com Japan Yukiko Sanjo yukiko.sanjo@mercer.com Korea Jungeun Ahn jungeun.ahn@mercer.com Malaysia Jesslyn Celest Tan jesslyncelest.tan@mercer.com New Zealand Dylan ward dylan.ward@mercer.com Pakistan Farooq Ansari Farooq.Ansari@abacus-global.com Philippines Floriza Molon floriza.molon@mercer.com Singapore Corina Huang corina.huang@mercer.com Sri Lanka Archana Natarajan archana.natarajan@mercer.com Taiwan Angela Lin angela.lin@mercer.com Thailand Thanthita Lertsurathitiporn thanthita.lertsurathitiporn@mercer.com Vietnam Nguyen Hoa (ext 600) hoa.nguyen@talentnet.vn Mercer (Singapore) Pte Ltd ( E)