My company is a small business and we struggle with overall rising costs, which includes the provision of health benefits for our employees. How can we strike a good balance between being prudent and offering comprehensive medical benefits so that we can still remain competitive within our industry?

Today's subject matter expert

Julia Radchenko
Julia Radchenko
Health Consulting Leader, Singapore, Mercer

Small and medium-sized enterprises (SMEs) may not have as much financial or bargaining power, but they have the unique ability to meet employees’ needs very specifically. Large corporations, on the other hand, may not be able to meet the needs of a large proportion of their employees, regardless of how comprehensive or flexible the benefits strategy may be.


As an SME owner or a HR representative working in an SME, you can speak to employees to understand what they need and want, and invest your resources in those specific areas wherever possible. For example, if your employees share that they already have personal/spouse’s inpatient medical cover, then trying to match up to market practice in this area will not be helpful. Likewise if employees don’t value term life and personal accident insurance cover. And if employees prefer to visit family GPs which are not in any GP panel network, then you can consider offering a spending account to reimburse GP fees instead.


Being prudent yet competitive may not mean offering comprehensive medical benefits. Speaking to employees is key to identifying their true concerns and addressing these concerns will likely have a bigger impact on employee engagement, attraction, and retention than simply following market practices.


Alternatively, there are solutions catered to SMEs’ needs in the market that you can outsource health benefits management to. These portfolio-rated products are suitable even for companies with just two headcount, and you can select the level of coverage and cost that you’re comfortable with. You get to prioritize certain benefits that your employees would value.


Portfolio-rated products spread the risk within the portfolio of businesses they cover and help with cost containment as they limit the impact on the SME’s premium rates, which are locked for two to three years. You can enjoy comprehensive benefits at competitive rates, with plans ranging from term life to inpatient and maternity plans.


Moreover, benefit levels are benchmarked against all industries’ median level. Benefits are also reviewed every two to three years on a portfolio level to ensure that they remain relevant, service levels are satisfactory and that insurer’s premium rates stay competitive.

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