Mumbai: A survey of 102 Indian companies by two global consulting firms shows less than one-third of these companies want to implement flexible benefits as a way to retain their best talent during the current economic downturn.
The survey, titled Marsh and Mercer 2008: Flexible Benefits Survey, was done by Mercer, a global consultancy and Marsh, a unit of Marsh and McLennan Companies.
Flexible benefits allow employees to choose the mix of health insurance and other benefits such as vacation leave and dependants’ benefits to suit their needs.
The survey shows that 73% firms in India want their benefits to be more relevant to employee needs, and that at least 50% of the companies are upbeat about such benefits.
A separate research report from international human resources (HR) consultancy Emmay HR, titled HR Challenges ’09, says the three key challenges for Indian companies are to reduce cost, motivate employees and repurpose people. The report is based on a survey of 921 respondents across five cities in India
Marsh and Mercer have also developed an HR solution called Flex, which companies can adopt. This solution allows employees to choose their own mix of benefits, while its cost-shifting nature can help cut employer expenditure as health care costs rise.
“In this economic downturn, most employers are not giving raises or bonuses and are cutting staff. This is the only time when the employers can actually implement some cost containment methods because the employees understand the need to share the burden,” says Rosaline Chow Koo, Asia-Pacific business leader (health and benefits) at Mercer.
The Marsh and Mercer survey covered leading Indian private sector firms such as Aditya Birla Group, Biocon Ltd, HCL Technologies Ltd and Emmar MGF Land Ltd. At least 70% firms surveyed are in the field of technology, telecommunications, manufacturing pharmaceuticals, health care, financial services and business process outsourcing.
In the Emmay report, one-third of the respondents said rising medical expenses have made it hard to sustain employee benefits cost. About 48% of companies cited cost control as their priority while at least 62% respondents said repurposing talent is their main concern.
According to the study, Indian companies are banking on their consistent high performers in the economic downturn. “Involving the high performers in management decision making is the first aspect mentioned by 53.3% of the respondents,” the report says.