Rising inflation and increasing cost of employee benefits in India is making companies to rethink employee benefit strategy. Almost 60% of companies in India (surveyed) are planning to review their benefit strategy in the next 12 months, said a study by Towers Watson.
According to the findings of India Benefit Trend Survey by Towers Watson, another factor that has warranted this rethink is low employee awareness and appreciation - one in three Indian employers is spending more than 20% of total payroll on benefits, yet a sizable 43% believe their employees do not sufficiently value the benefits provided to them.
"As the war for talent intensifies, 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. 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," said Anuradha Sriram Director- Benefits, Towers Watson India.
The findings suggest that in time to come, companies will move away from the 'one size fits all' approach to a more customised model by employing a robust benefit 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.
According to the survey for Asia Pacific region, in the next 12 months, employers are looking to diversify their benefit programme to address changing employee needs and experience. Some of the areas that may see change include-lifestyle, child care benefits, financial planning and the ability to sell/buy annual leaves.
The findings of the survey also stated that there is an increase of 30% in the number of Indian companies looking to improve their communication of their benefits to employees as compared to last year.
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Understandably, employers in India are beginning to acknowledge the importance of communication in improving the perceived value of benefits with73% companies (15% higher than the APAC average and a 30% increase over last year) ranking increased employee communication as a key action area in the next 12 months. This is followed by reviewing benefit plan design and strategy (64%) and increasing flexibility in benefits (42%).
The survey was conducted from September 5th to 27, 2013 and 81 companies across industries participated.