Around 60 per cent of Indian firms are planning to review their employee benefit strategy in the next 12 months amid economic slowdown and high inflation, says a survey.
Rising benefit costs and the fact that employees do not sufficiently value the benefits provided to them is driving companies in India to review their benefit strategy, according to global professional services company Towers Watson.
Its India Benefit Trends survey showed that 1 in 3 Indian employers is spending more than 20 per cent of total payroll on benefits, yet a sizable segment, 43 per cent, believe their employees do not sufficiently value the benefits provided to them.
"Amidst the economic slowdown, rising inflation and increased benefit costs, benefit optimisation has become the buzzword among employers," Towers Watson India Director - Benefits Anuradha Sriram said.
Sriram further added that "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".
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.
Commenting on this trend, Sriram said: "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."
Moreover, employers in India are beginning to acknowledge the importance of communication in improving the perceived value of benefits, followed by reviewing benefit plan design and strategy and increasing flexibility in benefits.
"In time to come, we foresee companies moving 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," Sriram added.