Employee benefits have gradually emerged as a powerful tool to attract and retain key talent and are increasingly being leveraged to enhance the Employee Value Proposition (EVP).
Rising benefit costs and low perceived value are driving companies to review their benefits strategy, with 60 per cent planning to do so in the next 12 months, reveals a study by Towers Watson called ‘India Benefit Trends’ survey. One in three Indian employers is spending more than 20 per cent of total payroll on benefits, yet a sizable 43 per cent believe their employees do not sufficiently value the benefits provided to them. Further, over half of the employers surveyed believe that poor employee understanding of benefits is a serious challenge facing their benefits strategy in the next twelve months. The findings bring to the fore an important fact that simply increasing benefit spend does not necessarily improve perceived value.
Anuradha Sriram, director – benefits, Towers Watson India points out, “Benefits in India are no longer just good-to-have components or provided to comply with legislation. We see that they are being used strategically by employers to differentiate themselves from competition.”
Sharing her views on the findings of this report, Ritu Singh Verma, regional director, HR, South Asia – Starwood Asia Pacific Hotels & Resorts Pte Ltd says, “Benefits are not well-structured and consistent in India and we are maturing as a market in terms of compensation strategy across companies and industries. Even though cash is an important attraction driver, it loses its sheen when we look at engagement and retention and to create a stickiness in the organisation, we have to use a more personalised benefit strategy for employees.”
Benefits strategy in the Indian context is clearly evolving; it has moved from being just allowances and subsidies to a model, which highly supports a flexible work environment, asserts Monty Bharali, director & head for HR, DST, India.
Organisations across industries are working towards providing better benefits to their workforce. However, are employees appreciating those efforts? The study observes that one in three Indian employers is spending more than 20 per cent of total payroll on benefits, yet a sizable 43 per cent of organisations believe their employees do not sufficiently value the benefits provided to them. “A benefit programme is an essential part of a business and must be outlined after a careful study and analysis of the requirements and regional needs. There is a lack of awareness that leads to a poor understanding of these benefits. Every HR practice of an organisation should ensure that the existing employees have complete awareness of the benefits and are making optimal use
through a body of clearly defined guidelines,” expresses Manish Choudhary, VP WW Engineering, Pitney Bowes India.
It is clear that there is a need to review benefits strategies if organisations want to retain talent and also stay competitive in the market. So, what are the major actions planned by organisations with regards to benefit programmes in the next 12 months? Which aspects will they focus more on? Choudhary points out that going forward, the organisations will be focusing on ensuring that the employee benefits are aligned with the organisation’s overall business strategy and are well-planned and effectively communicated.
Sriram shares, “We found that communication was a key theme and that companies in India are looking to improve communication around benefits. We also found that the number of companies who are looking at flexibility in benefits is set to double over the next year, which shows that ‘employee choice’ as a concept is set to grow. This is particularly important given the poor appreciation of benefits even as benefit costs continue to rise. By adding flexibility to their programmes, employers can provide a core level of benefits whilst also making a broader selection of options available that employees can tailor to their individual requirements. This is likely to be more cost-effective than simply increasing the number of programmes in a ‘one-size-fits-all’ approach. Increasing flexibility in a benefits programme is also an opportunity for an employer to demonstrate that they understand that different segments of their workforce have different needs and preferences.”
“The future is the way of the flexible workplace and evolved communication channels, both of these would be invaluable in shaping a successful benefits package in the enterprise,” expresses Bharali.
So, with a majority of organisations in India Inc looking at reviewing their benefits strategy, employees would certainly be smiling their ways to their workplaces!
Source : The Times of India