Employers are struggling to meet the rising cost of benefit plans as a result of the changing landscape in the workplace, according to a report from Aon.

The 2022 Asia Pacific Benefit Trends Report surveyed over 500 responses from a range of employers with less than 1,000 employees to more than 10,000 employees.

The top five employee benefits challenges employers face are:

• The rising cost of benefits plans
• Offering diverse benefits and options
• Benefits that are perceived to be below market
• Insufficient benefits for employees’ needs
• Insufficient data to make informed decisions

Aon said that, with the pandemic decelerating, many governments have pronounced Covid-19 as endemic which reduced or completely removed subsidies. This, in turn, has forced companies to move to private plans.

“Given the macroeconomic landscape and rising inflationary pressure, the expectation is that treatment costs will continue to increase and create larger than normal premium rate actions over the coming renewal cycles,” the report states, noting that average treatment costs have risen by 15% to 40%.

Pointing out that the unpredictability of the pandemic changed how people work, company operating practices, and employee support systems, Covid-19 brought about the need to adjust to new legislation and changing conditions. Covid-19 affected commercial supply, demand, logistics and strategy, Aon said. With that, organisations are shifting priorities to meet the demands of a more diverse workforce.

The top 5 priorities in addressing employee benefits are:

• Benefits benchmarking
• Employee wellbeing
• Addressing diverse benefits needs
• Benefits communications
• The right support for employees

Additionally, about one-third of the survey respondents say they expect 25% of their employees to work from home in the future.

The survey also revealed which strategies employers were unable to immediately implement, including flexible benefits, retirement plan reviews, market entry in specific countries, benefit plan inventory, and benefit plan solutions for employers with low employee in country headcounts.

Some employers, however, plan to implement some of these benefits in the future, including mid- to long-term benefits strategy, flexible benefits plans, and more sustainable renewal terms.