Companies in India, offer few benefits besides life and health insurance to their employees, despite the latter’s interest in providing for their families in case of illness, disability or death. Employees are even willing to buy these benefits, says a new study by MetLife International, a subsidiary of global insurance and financial services company MetLife Inc., which offers products that address this need. The study says there is a disconnect between the benefits employees want and what Indian companies are willing to offer. Employees in India, it adds, are keen on retirement benefits and are willing to bear the entire cost of this.
According to the study, around 51% of the respondents, who have not been provided insurance or retirement benefits (or products) by their companies, are interested in purchasing term insurance, while 48% of them want to buy retirement planning products. Almost one third of such employees say they want to do this because their companies do not provide them with retirement/insurance benefits. “Except for provident fund and gratuity, companies in India are not obligated by law to offer retirement benefits,” says Ganesh Shermon, partner and head, human capital advisory service, at audit and consulting firmKPMG India Pvt. Ltd. “Therefore, companies are not keen on offering retirement benefits.”
The study says that employees in India are typically provided one product (or benefit) by their employers, as against an average of 6.9 in the US and 1.5 in Mexico. About one-third or 35% of Indian companies that currently offer no benefits, however, said they would look to offer retirement benefits within the next three years.
Companies surveyed said the main objective of offering employee benefits was retention of talent. The study says Indian firms would start offering more benefits as their employees became more aware of international practices. “Rapid economic expansion and the growth of multinational companies in India with benefit programs are increasing competition for the limited pool of highly skilled and better educated workers,” the study quotes William J. Toppeta, president, MetLife International, as saying.
The top financial concerns of employees regarding retirement include “having enough money to take care of elderly parents or in-laws” (79%) and “running out of retirement money” (71%). Yet, only 35% of the respondents have ascertained their retirement needs and only 20% actually planned for retirement.
The MetLife Study of International Employee Benefits Trends, which was conducted between November 2006 and March 2007 by GfK Custom Research in India, Mexico, Australia and the UK, polled 2,507 full-time employees across companies. In India, the study surveyed 1,039 employees and 523 companies.