Employee benefit programmes gaining importance: Survey

According to a recent survey, India Benefit Trends, conducted by global professional services company Towers Watson, companies are increasingly under pressure to review their benefit strategy. Sixty per cent of them plan to do so in the next 12 months against the backdrop of rising inflation and the increasing cost of employee benefits in India. Another factor is low employee awareness and appreciation. One in three Indian employers is spending more than 20 per cent of total payroll on benefits, but 43 per cent believe their employees do not sufficiently value the benefits provided to them.

Towers Watson helps organisations improve performance through effective people, risk and financial management. Eighty one companies from various industries participated in the survey, conducted in September 2013. Participants by industry in India were led by BPO/offshoring, consumer goods, engineering and manufacturing, and financial services.

More than half of all employers believe that poor employee understanding of benefits is a serious challenge for their benefits strategy in the next 12 months. Simply increasing benefit spending does not necessarily improve the perceived value, the survey notes. Employers also recognise the need for innovation, with almost one-third offering or planning to offer non-traditional benefits, and an equal number planning to introduce flexible benefits. It also notes that rising benefit costs remain the biggest challenge for employers in the Asia-Pacific region, and that Indian companies appear to be feeling this pressure especially.

Anuradha Sriram, Director - Benefits, Towers Watson India, says: "Amid the economic slowdown, rising inflation and increased benefit costs, benefit optimisation has become the buzzword among employers. As the war for talent intensifies, employee benefits have gradually emerged as powerful tool to attract and retain key talent, and are increasingly being leveraged to enhance the employee value proposition. However, given the poor understanding of benefits among employees, companies in India are faced with a balancing act of offering flexible, innovative and customised benefits, increasing perceived value and sustaining employee costs. We foresee companies moving away from the 'one size fits all' approach to a more customised model by employing a robust benefits framework designed to meet the varying needs of a diverse workforce. The immediate future will see significant effort invested by employers in focused employee communication aimed at improving the perceived value of benefits."

Survey Highlights

1. 70% Indian companies reviewed their benefits within the past year, while 60% of companies surveyed will do so in six to 12 months.

2. Four in five Indian companies have a documented benefits strategy.

3. 30% increase in the number of Indian companies looking at improving communication about benefits to employees compared to last year.

4.  43% companies feel employees don't value the benefits.

5.  Eight in 10 companies have reviewed and updated their benefit plan design in the last 12 months.