how does flexible employment benefits mncs
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A leading multinational company in India had an elaborate healthcare and insurance scheme for its staff as a part of its employee benefits plan. The HR head thought the plan was a winner as it kept employees happy, thereby making the company an employer of choice.
Two things made him change his mind. One, the management woke up to the fact that the company was facing double-digit increases in healthcare costs and premium; and two, internal surveys showed employees, especially the younger ones, weren't too happy with the benefits plan.
The company has since shifted to what is called a flexible benefits plan where the costs are shared between the employer and the employees.
Under the flexible benefits programme, the MNC found that a quarter of employees chose a six-month sabbatical (after five years of service) and profit-sharing as their preferred benefits. And while over half of those over the age of 45 years chose private medical insurance as one of the main benefits they would like to receive, those in the 24-30 age group had a fancy car and a free in-house bar on top of their priority list.
Flexible benefits plans, also called cafeteria plans, are arrangements in which employees tailor their benefits package to their specific needs. Employees can select the benefits they value most and may forgo benefits of lesser importance to them.
Under a flexible arrangement, an employer allocates a specified amount of money to each employee to 'purchase' benefits. In this way, the employers control the amount they spend on each employee for benefits, while the employee selects the benefits. This method differs from a traditional benefits programme, in which an employer offers a standard package with few, if any, choices to employees
The MNC is still in a minority. Watson Wyatt, which recently conducted an employee benefits trends survey across 12 countries in the Asia-Pacific region, including India, found that provision of traditional benefits - under which a similar set of benefits are offered to all employees - is dominant in the Asia Pacific region.
This is despite the fact that such a benefits design has a limitation - employees cannot select the benefits they value the most and are provided with a one-size-fits-all solution. Only 17 per cent of the companies in the survey sample currently provide flexible benefits. The good news, however, is that 20 per cent of the companies are considering implementing it.
Two things made him change his mind. One, the management woke up to the fact that the company was facing double-digit increases in healthcare costs and premium; and two, internal surveys showed employees, especially the younger ones, weren't too happy with the benefits plan.
The company has since shifted to what is called a flexible benefits plan where the costs are shared between the employer and the employees.
Under the flexible benefits programme, the MNC found that a quarter of employees chose a six-month sabbatical (after five years of service) and profit-sharing as their preferred benefits. And while over half of those over the age of 45 years chose private medical insurance as one of the main benefits they would like to receive, those in the 24-30 age group had a fancy car and a free in-house bar on top of their priority list.
Flexible benefits plans, also called cafeteria plans, are arrangements in which employees tailor their benefits package to their specific needs. Employees can select the benefits they value most and may forgo benefits of lesser importance to them.
Under a flexible arrangement, an employer allocates a specified amount of money to each employee to 'purchase' benefits. In this way, the employers control the amount they spend on each employee for benefits, while the employee selects the benefits. This method differs from a traditional benefits programme, in which an employer offers a standard package with few, if any, choices to employees
The MNC is still in a minority. Watson Wyatt, which recently conducted an employee benefits trends survey across 12 countries in the Asia-Pacific region, including India, found that provision of traditional benefits - under which a similar set of benefits are offered to all employees - is dominant in the Asia Pacific region.
This is despite the fact that such a benefits design has a limitation - employees cannot select the benefits they value the most and are provided with a one-size-fits-all solution. Only 17 per cent of the companies in the survey sample currently provide flexible benefits. The good news, however, is that 20 per cent of the companies are considering implementing it.
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They had to elaborate health scheme
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