India Market Pulse Survey - Benefits April 2010

Transcription

1 India Market Pulse Survey - Benefits April

2 Content Background Key findings Analysis Appendix List of participating companies 1

3 Introduction and Background As the current economic condition continues to evolve, companies are undertaking strategic changes to stay ahead as the economies rebound. Amidst continued budget constraints and other cost-containment measures, HR practitioners are putting more focus into benefits. HR practitioners are concerned about the market competitiveness of their benefits plans, the effectiveness of benefits as a retention tool, the affordability of benefits, as well as the ability to customize benefits to meet employee needs. With this in mind, conducted a market pulse survey in India in April 2010 to gather HR information on how companies are dealing with benefits in 3 key areas: Retention schemes Benefits budget Changes in benefits policies One hundred and seventy-seven participants from one hundred and forty-seven companies from various industry sectors (see appendix for the list of participants) participated in this market pulse survey. appreciates the time taken by companies to participate. We are pleased to present the results of the survey. We are available to discuss the issues with any company who needs our consulting and advisory support. 2

4 Participants Demography 2% 2% 2% 2% 2% 3% Industry Section Total Participants = % 40% 3% 5% 6% 7% 6% 7% High-Tech and Telecommunications Consumer Goods Pharmaceuticals & Healthcare Engineering Automotive Logistics Aerospace Chemical Electronic and other Manufacturing Banking & Finance Oil & Gas, Mining (Energy) Market Research Insurance Miscellaneous 3

5 1 Key Findings 4

6 Key Findings Retention schemes In terms of retention schemes, companies are generally pleased with the effectiveness of their benefits policies. 79% of companies have indicated that they think the benefits offered in their organization are effective in retaining employees. Benefits budget 50% of companies are not planning to increase the benefits budget this year. 23% of companies have increased or are planning to increase the budget for benefits. Changes to benefits policies 50% of companies plan to make changes to their benefits policies, particularly for the insurance, allowances and medical provision. Changes in benefits are prompted by the need to improve market competitiveness and to serve employees needs better. Fringe Benefit Tax Companies are generally not compensating employees for the additional tax they have to bear. 5

7 2 Analysis 6

8 Retention Schemes The majority of HR practitioners that responded to our survey (79%) believe that the benefits offered in their organization are effective in retaining their employees. Some instruments that these companies use to retain their employees include Insurance Superannuation scheme Long term incentives and short term incentives Employee training and development programs Car schemes Training Flexible benefits 7

9 Benefits restoration and changes to benefits budget Did you remove/reduce benefits in 2009? Have you increased or are you planning to increase your benefits budget for 2010? 87% Yes No 13% We are planning to increase the benefits budget this year 17% Unsure 27% We have increased the benefits budget for this year 6% No, we are not planning to increase the benefits budget this year 50% Although the global downturn resulted in mounting pressures to contain cost, companies were careful and not hasty to cut the benefits budget in Only 13% (23) of companies removed or reduced benefits in companies will be restoring benefits. With continued efforts to contain cost, 50% of companies are not increasing their benefits budgets this year. For companies that have increased or are planning to increase the budget for benefits, the median increment is 10%-15%. Companies that are increasing the budget for benefits within this range are mainly from the high tech, and banking and finance companies. 8

10 Benefits restoration and changes to benefits policies Do you plan to make changes (apart from restoring benefits) to your benefits policies? Yes, we will be making changes in % Unsure 23% Yes, we intend to make changes but no concrete plans drawn up 36% No 27% Will increase/have already increased benefits budget 39% Uncertain about plans 21% Changes to 2010 Benefits budget No change to current benefits budget 40% 50% of companies (89 companies) are intending to make changes to their benefits policies. 36 companies will be making changes to the policy within the current budget while 35 companies will increase or have already increased the benefits budget. 19 companies are still uncertain about plans for the benefits budget. 9

11 What are changes prompted by? Factors prompting change in benefits policies % of companies Improve market competitiveness 35% To serve employees' needs better 31% New perquisite regulation 15% Reducing benefits costs 10% Requested by management 4% Other reasons 5% 10

12 Benefits that companies are likely to change The following graph represents benefits that are likely to be changed by companies which are considering making changes to their benefits No. of responses Insurance Allowance Medical Vehicle Training&Development Retirement Leave Perquisites Others

13 Changes to benefits policies Allowances Almost 30% of companies that indicated changes will be made to allowance are intending to increase transportation allowance Perquisites Companies are likely to make changes to long service awards Car policy More companies are looking to introduce car lease policy Which vehicle policy will your company likely change? 35% 30% 33% 33% 33% 30% 30% 30% 30% 25% 21% 20% 15% 10% 5% 0% Sales Top Mgt Sales Mgt Non-sales Top Mgt Non-sales Mgt Car Provision Car Allowance 12

14 Changes to benefits policies Insurance Group term life, personal accident and critical illness are the top three insurances where companies are likely to make changes to the policies Health Companies are focusing on making changes to their hospital & surgical plan and outpatient clinical benefit. Which medical policy will your company likely change? 60% 50% 40% 30% 20% 10% 0% 38% 33% Outpatient Clinical 26% 26% Outpatient Specialist 50% 45% Hospital & surgical 26% 26% Major medical 12% 10% Maternity 40% 38% Medical check-up 21% Dental 21% 5% 5% Vision Managerial Non-Managerial 13

15 Flexible benefits Are you planning to introduce flexible benefits? We intend to implement but no concrete plans drawn up 20% Yes, we will be introducing flexible benefits in % No 31% We already offer flexible benefits 17% Unsure 27% Offering flexible benefits is a growing trend. 42% of companies have expressed interest or is currently offering it. In order to meet the different needs of employees from the different demographics, employees need to have the ability to customize their own benefits program. 14

16 Wellness Program Do you have a wellness program? No 46% Yes 31% Not yet, but planning to introduce 23% Companies have wellness programs as preventive measures to manage their health costs. Some measures include wellness program to help employees manage stress, time and personal work life, health talks to educate employees on preventive care measures, employee sports and recreational programs to promote a healthy lifestyle, as well as family life education and support. 15

17 Compensation for Fringe Benefits Tax Reaction to changes in the Fringe Benefits Tax regulation No, I will not compensate nor take any other action Yes, I will compensate all employees for the additional tax they will have to bear Unsure/ undecided Yes, I will compensate only my key employees for the additional tax they will have to bear Wait and see Other arrangements (i.e. partial compensation, one time assistance) % of Companies 79% 7% 7% 4% 2% 2% Companies are generally not taking any action to compensate their employees for the additional tax they have to bear with the amendment of the Fringe Benefits Tax regulation. 16

18 3 Appendix 17

19 Appendix: List of Participating Companies AB Mauri Accenture Services Aditya Birla Group Adobe Systems Advanced Digital Broadcast Adaro AET India Alstom Amazon.com Australia and New Zealand Banking Group Applied Materials India Arrow Electronics India Ascendas Land Astra International Ausenco Services Avago Technologies Avaya Axis Asset Management Company Axis Communications (S) Becton, Dickinson and Company Black & Veatch British Petroleum Broadcom Corporation Buckman Laboratories (Asia) CA Technologies India Cadbury Caterpillar China Mobile Pakistan Cisco Systems, India CMC Corning Incorporated CP Kelco Singapore CSS Corp Cummins Danfoss Danisco Singapore Danone Asia Pacific Management Delta Electronics Thailand dianping.com Eastman Chemical Asia Pacific EMC EmPower Research Knowledge Services Endress+Hauser India ExxonMobil FCI Asia Finisar Technology India First Data FM Engineering FM Global F-Secure Corporation General Electric Genworth George Institute for International Health - India Germanischer Lloyd 18

20 Appendix: List of Participating Companies Getronics Solutions (M) S/B Givaudan (India) GN Netcom Godrej Tyson Foods Google India HCL Technologies Heinz India Hewlett-Packard IDFC IMS health Independent Technology Systems Infineon Technologies Intec Intervet India INVISTA ITW India Johnson Controls Juniper Networks Kaspersky Labs Asia Keppel Land Kerry Ingredients Kraft Foods Asia Pacific Lafarge Concrete Vietnam Co. Larsen & Toubro Lear Automotive India Lineage Power L'OREAL VIETNAM MasterCard MediaCorp Micron Semiconductor Asia Millipore Singapore Molex Far East South Management MphasiS Monolithic Power Systems MWH Consultants (S) MWH India NCR Nov Nordisk Numonyx Asia Pacific Owens Corning Parexel Phillips Carbon Polycom Technology (R&D) Center PPG Industries International Premier Farnell QAD India RCI India Reliance Infrastructure Rockwell Collins Rolls-Royce Singapore Sanofi-Aventis Pakistan SAP Satyam Computer Services Savvis Singapore Company Schneider Electric Seagate 19

21 Appendix: List of Participating Companies Sensata Technologies India Shell Eastern Petroleum SIRVA Relocation SITA SoftBrands an Infor affiliate Solutia Solvay Pharma India Sony Electronics Asia Pacific St. Jude Medical India Sumitomo Corporation Symantec Software Target Corporation India Tata Communications Textron Thaicom Public Company The Walt Disney Company (India) Thomson Reuters TNT Express TransTel Engineering Triumph International (Phils.) Tyco Healthcare Unilever Asia United Spirits Verigy Vestas Wind Technology India VF Asia Virage Logic Corporation Visa Worldwide W R Grace (S) W.L Gore & Associates (Pacific) Western Union Company Wipro World Vision India Xilinx Asia Pacific XL Capital ZOHO Development Centre (India) 20

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23 Additional Reference For more detailed information, refer to our 2009 India Benefits Survey. Market data based on 133 companies representing various industry sectors. s Benefits Survey covers medical benefits, insurance benefits, leave benefits, allowances, company cars, and much more. If you are interested to view a demo of the delivery tool and the questions asked in our survey, please contact us India Benefits Survey results will be released 31 st July. Contact us for more information Name: Ritu Mehra [email protected] Phone:

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