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Coming soon: Flexi employee benefits
March 09, 2009 18:11 IST
With economic slowdown casting a shadow on profits, companies may increasingly turn towards offering flexible benefit programmes to employees, among other measures, for managing costs and attracting the right talent, a survey by global HR consultancy Mercer says.
According to the survey, flexible benefits programmes, which allow employees to choose a mix of health insurance and other benefits as per their needs, has been gaining momentum, particularly in emerging markets like India, China and Vietnam.
In the Marsh/Mercer Indian Flexible Benefits Survey 2008, the consultancy found that close to half of the employers (48 per cent) surveyed are upbeat about flexible benefits and most of them want to implement it within the next one or two years.
The commonly included benefits in the flexible benefits plan are dependents' benefits, medical insurance and vacation leave benefits.
Amid rising healthcare costs, the cost-shifting aspect of flexible benefits plan can reduce the employer expenditure and in the current economic environment that could help in cutting unnecessary expenses.
Interestingly, talent attraction and retention has emerged as the major driver for adopting flexible benefits with 30 per cent of the respondents.
The survey stated that in Asia, the competition for highly skilled talent is still fierce amid cyclical economic downturns. "Given the challenges of the current economic environment, we may see some variance in the percentage of implementations," the Mercer survey, however, said.
Better cost management via flexi benefits is another key driver for implementing the programme by employers, with about 12 per cent voting for the same.
The next key motivator to adopt the new benefit plan is to create greater value from existing benefits (13 per cent), the survey revealed.
Further, the survey suggested that 73 per cent of the respondents want their employee benefit programmes to be more relevant to employees' needs and give choice to staff.
Meanwhile, 41 per cent of employers want to derive greater value from existing benefits -- either in the form of better coverage at the same price or having employees better understand and value their benefits.
The survey in which 102 respondents participated was conducted across sectors including technology and telecom, manufacturing, pharmaceutical, financial services and BPO.
However, it is not all that rosy about the flexi programme as 27 per cent employers are concerned about the administrative complexities involved in the process as against the traditional (one-size-fits-all type) of benefit plans.