Employee Benefits, Global
Spotlight on India – A guide to rolling out global benefits technology
03-10-2023
Hidden complexities in a region with low-flex benefits
Similar to some European countries like France, Switzerland and Australia, India is a location with limited benefit options, low flexibility, and a reliance on state mandated benefits. So, you might expect an Indian benefits platform to be at the Simple end of our Simple-to-Complex benefits scale; most companies offer life insurance, personal accident, pension and medical, and some offer allowances for wellbeing, meal vouchers and EAP access. But, the extensive medical insurance plan makes India more complicated than most other regions.
High competition for talent is driving competitive benefits packages – especially in the tech and professional services sectors in big cities. Indeed, our 2023 Evolution research found that 33% of employees surveyed in India are actively looking for a new job; slightly higher than the US (27%), and double the rates in the UK (16%), and Singapore (18%). Furthermore, 65% of employees in India say their expectations of their benefits package have increased in the last 12 months, particularly when it comes to flexibility and greater personalisation of benefits.
A brief overview of the benefits landscape in India
Pension
Organisations have traditionally offered a state-funded Provident Fund, but supplementary pension plans are becoming more popular, with employees typically choosing contributions of 10% of annual salary.
Life assurance
Our research shows that nearly half (46%) of Indian employees value life assurance above all other benefits and this is reflected by employers, with the majority of companies offering 3x annual salary of cover. Personal accident insurance is also very common, with disability provision included often at 3x annual salary. We’ve also seen companies offer enhanced cover ─ at the employees’ expense ─ via their benefits offering.
Group medical insurance
With limited state provision, medical insurance for employees and their families is highly valued; 68% of surveyed employees in India said it was important that their benefits offer them protection if they’re ill. Medical cover in India is comprehensive (all employees are funded for themselves, their partner, two children, and two parents) and complicated (due to multiple layers of funding). The total cost to an employee can become confusing very quickly, especially where allowances are used for upgrades and additional family members ─ in most cases, employees can add various family members including their spouse, children, parents and parents-in-law. To further complicate the plan, parents and parents-in-law can have a different level of cover to the employee, their partner, and their children!
The medical plan is typically made up of:
- A core contribution from the company
- Optional additional contributions to enhance coverage and add dependants at the employee’s cost
- Seven optional add-ons
- Permutations for dependants
Other benefits
Most companies offer meal/lunch allowances and a stipend towards the cost of commuting. Organisations with more advanced benefits offerings are starting to offer allowances to cover childcare costs and technology loans.
Flex funds
More organisations are starting to offer flex funds, so employees can choose different medical options and select other benefits such as increased life cover, health assessment, and pension contributions.
Any left-over funds are often allocated to a wellbeing or personal allowance that can be used for gym membership, including sports and health-related costs that medical might not cover.
Case study: Rolling out medical benefits for Salesforce in India
“At the moment in India, benefits are traditionally broken into subsections. You have one benefit which is supported by one system, and another separate benefit backed by another system. We needed one system which was able to cumulatively convey the overall Employee Value Proposition – we needed a ‘one stop shop’ for benefits.” – Pradeep Singh, Reward Lead at Salesforce India
What did we do?
We automated the administration of the plan using OneHub, saving our customer admin hours across membership management, reporting, paper-based sign up, and processing life events and changes. An online self-help system was implemented to address the queries from a population of 3,000 employees that were previously overwhelming the local HR team.
Result = 200 administration days saved
Due to the platform automation and self-serve support, direct employee queries dropped to just a few per day. This was much more manageable for the HR team and meant serious questions needing HR intervention were processed and turned around quicker and more efficiently.
Paul Andrews
Paul joined Benefex from Mercer in 2019 with a wealth of international benefits experience, having worked with a large number of high-profile, multinational clients to review their approach to global talent and reward. He leads Benefex’s global benefits delivery team and he’s doing an excellent job of it, if we may say so ourselves. He is skilled in international risk assessment and management, legislative compliance, trend research, cross-border claims, and customer relationship management.
03-10-2023
