Leveraging Employee Benefits in the Malaysian Education Industry: Is This a Way Out of the Teacher Shortage Crisis in Malaysia?

Why is the education industry unattractive to educators?

As the talent landscape gravitates towards prioritising a better work-life balance, it is not surprising that a global study recently conducted by the Education Endowment Foundation found that workload and working conditions were the biggest factors determining retention rate. That is, the poorer the working conditions and workload, the higher the retention rate.

When investigating system-level factors, where factors are controlled by a policy or organisational level above the school, financial incentives seem to be the key driver in the attraction and retention of educators. Financial incentives include higher salaries and better employee benefits. Unfortunately, though educators should be regarded as highly skilled individuals, they are not receiving the financial incentives that align with their skills. For instance, the basic starting salary of an educator in government schools starts at RM2,200 with merely an RM225 increment per year (~10% annual increase). The issue of low financial incentives is more prevalent in public schools as compared to private schools, where they are less nimble to adjust the pay grades of their educators, a further deterrence for more individuals to join the education industry.

With 74% of Malaysiansprioritising attractive salaries and benefits when choosing an ideal employer, this highlights the need for schools or the ministry to increase financial incentives for educators if they want to remain attractive to educators. This is where Mednefits, a flexible employee benefits platform provider, comes into play. Their solution focuses on the employee benefits aspect of financial incentives, where they help employers effectively deploy an employee benefits strategy that is cost-effective yet keeps their employees satisfied.

This blog will discuss the common challenges faced by employers in the education industry when it comes to providing employee benefits, and the respective solutions to overcome them.

Challenge 1: A master overview of employees/teachers across all schools

The task of managing part-time teachers can pose significant challenges for educational institutions. As part-time teachers move between branches or schools to assume the role of substitute teachers, it becomes increasingly difficult for management to keep track of these individuals. This lack of oversight can have detrimental effects on the provision of employee benefits, as the process of ensuring that substitute teachers receive the same benefits as permanent staff becomes complicated and convoluted.

One of the main issues that arises from the movement of substitute teachers is the difficulty in accurately documenting their employment status and duration. Without a central system in place to track their assignments and monitor their presence in different branches or schools, it becomes challenging to determine the appropriate benefits to which they are entitled. This can lead to discrepancies in the allocation of health insurance, retirement plans, and other employee benefits, potentially leaving substitute teachers without the necessary coverage and support they require.

Solution

By implementing a multi-account access strategy, educational institutions can optimise their substitute teacher management procedures. This system facilitates a smooth transition of educators across various outlets, guaranteeing uninterrupted teaching and minimising disruptions resulting from absent teachers. Moreover, this approach enables the efficient administration of employee benefits, allowing the institution to maintain a centralised account encompassing the complete employment history of teachers, irrespective of the branches or schools they have served in. This not only simplifies administrative processes but also ensures that the institution can effectively manage and provide entitlements to teachers, regardless of their current assignment.

Challenge 2: Overutilisation and/or overconsumption

Traditional employee benefits approaches often result in overconsumption and overutilisation. One of the primary challenges with traditional benefits packages is the lack of visibility and control over employee usage. Without the ability to monitor and regulate benefits usage in real-time, employers are unable to effectively manage and allocate resources. This opens the door for employees to excessively utilise benefits without any repercussions, leading to increased costs for the company.

Solution

By expanding upon traditional employee benefits approaches, employers can implement innovative solutions to address the issue of overconsumption. This can include the use of technology-driven platforms that provide real-time tracking and monitoring of benefits usage. By leveraging data analytics and predictive modelling, employers can identify patterns of overutilisation and proactively intervene before costs spiral out of control.

Another potential solution is to implement a system that includes a cap on benefits and requires employees to pay out of pocket if they exceed their allotted amount. By capping employee benefits, employers can establish a maximum limit for each benefit category, such as healthcare, dental, or vacation days. This ensures that employees do not go overboard and helps control costs. If an employee exceeds their benefit cap, they would be responsible for paying any additional expenses out of their pocket. This approach not only encourages employees to be mindful of their usage but also holds them accountable for their choices, ultimately resulting in a more cost-effective benefits program for the organisation.

Challenge 3: High turnover rate

Early retirement can be seen as a viable option for individuals who have been overworked while having low financial incentives and are seeking respite from their demanding careers. This phenomenon was evident in a recent case where thousands of teachers applied for voluntary retirement due to their overwhelming workloads. In 2021, a staggering 4,360 teachers in Malaysia submitted applications for early retirement, to commence their retirement in the following year. The sudden and high influx in the departure of teachers can make it difficult for employers to constantly remove or add new employees, calling for a solution that can easily facilitate this time-consuming process.

Solution

The solution for corporates to effectively cope with the high turnover rate observed lies in the flexibility to remove workers in advance, allowing fixed entitled dollars for employees or implementing cap restrictions. By having a platform that eases the removal of employees, employers can accurately and effectively manage employee benefits.