Against the backdrop of rising inflation and increasing costs of employee benefits in India, companies are increasingly under pressure to review their benefit strategy with 60% planning to do so in the next 12 months, according to Towers Watson's India Benefit Trends survey.
Another factor that has warranted this rethink is low employee awareness and appreciation - 1 in 3 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.
Further, over half the employers believe that poor employee understanding of benefits is a serious challenge facing their benefits strategy in the next 12 months. The findings bring to the fore an important fact that simply increasing benefit spend does not necessarily improve perceived value.
Understandably, employers in India are beginning to acknowledge the importance of communication in improving the perceived value of benefits with 73% 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%).
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.
"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," says Anuradha Sriram Director - Benefits, Towers Watson India. "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. The immediate future will see significant effort invested by employers in focused employee communication aimed at improving the perceived value of benefits.”