From salary hikes to financial wellness: Why FY27 may redefine employee benefits in corporate India

As companies prepare their FY27 people strategy, experts say annual salary hikes alone are no longer enough to improve employee well-being. With rising living costs, debt burdens and financial stress affecting workplace productivity, organisations are being urged to move beyond compensation-led policies and adopt structured financial wellness programmes.

Kumar Binit, CEO of airpay money, believes financial wellness is emerging as a business priority rather than just an employee benefit. According to him, the focus should shift from how much employees earn to how effectively they manage their finances.

Salary alone cannot solve financial stress

For most companies, discussions around employee well-being are largely confined to annual appraisal and compensation cycles. While salary increments provide temporary relief, they often fail to address ongoing financial pressures such as EMIs, rent, education expenses, healthcare costs and family responsibilities.

Binit argues that employees with similar salaries can experience vastly different levels of financial security depending on their financial planning and access to support.

As a result, organisations need to ask broader questions beyond pay hikes, including whether employees understand their compensation structure, use available benefits effectively and have access to credible financial guidance.

Financial stress is affecting productivity

Recent research highlights the scale of the challenge.

A 2025 global study found that:

Financial stress indicator    Share of employees
Employees experiencing financial stress    55%
Unable to comfortably meet monthly expenses    14%
Little or no money left after monthly spending    42%

The impact is particularly severe among younger employees.

According to the study:

85% of Gen Z employees say financial stress affects their mental health.
71% report lower productivity because of financial concerns.

Experts say these findings have important implications for employers, as Gen Z is expected to make up a growing share of India's workforce over the coming decade.

Beyond compensation

Instead of focusing solely on annual increments, companies are increasingly being encouraged to build financial wellness ecosystems around employee compensation.

These may include:

Financial education and advisory support
Cash-flow and debt management tools
Responsible earned wage access for emergencies
Faster reimbursement systems
Integrated digital platforms combining salary, benefits and savings information

According to Binit, employees should be able to access salary, reimbursements, benefits and financial resources through a single interface rather than navigating multiple portals.

He also cautions that earned wage access should include appropriate safeguards to prevent excessive dependence on early salary withdrawals.

A business strategy

Financial wellness is increasingly being viewed as a strategic investment rather than an employee engagement programme.

High levels of financial stress can contribute to lower productivity, disengagement and higher attrition. Replacing employees often involves significant hiring, onboarding and training costs, making retention an important business objective.

Binit maintains that employers are not responsible for managing employees' personal finances. However, organisations can create systems that make responsible financial behaviour easier through better access to information, tools and support.