According to the latest compensation and benefit survey by online
portal TimesJobs.com, rising inflation and increasing cost of living has
led employees to re-evaluate priorities on how they are compensated for
their work. The survey indicates that most employees, across
generations, prefer a higher 'in-hand' pay out compared to other
components of the salary, TimesJobs said in a statement.
According to the survey, 87% employees prefer a customised
compensation structure, and organisations should take that into account
while designing benefits.
'In-hand' salary matters more to the junior level employees than the
ones at the mid and senior levels. Kishore Sambasivam, director-total
rewards, SAP, attributes this trend to the fact that employees at junior
levels are typically single and seek ownership. They do not want money
locked up in a PF or superannuation benefit. Employees at this level
want to plan their investment strategies which may have a higher risk
and return profile.
"Effective management starts by understanding who you are managing.
This boils down to knowing the expectation the workers have from the
organisation. As indicated by our survey, the future of compensation
will be a customised compensation and benefit package to suit the needs
of the employee," Vivek Madhukar, COO, TimesJobs.com said in a
statement.
According to the survey, almost 90% of the employees prefer a
customised compensation package. Their priority of what is more
important to them depends on the stage of their career and their age.
While salary remains core to all age groups, the baby boomer
generation prefers post-retirement benefits (24%) such as PF and
gratuity, there is a marked distintion for other perks in the Generation
X segment with 29% wanting club memberships, car, and company housing.
The youngest Gen Y generation is eager to have it all with an equal
balance of about 20% for each benefit - be it medical, post retirement
or other perks. But, by and large, salary remains the core consideration
for all levels coming in lowest at a considerable 41% for Gen Y and a
high of 57% for the boomer generation.
According to Sambasivam, employees prefer flexibility in their
compensation structure. This is dependent on the changing demographic
profile, priorities, preferences, risk orientation, individuality and
'live-in-the-present' mindset. Traditionally, companies focused on
long-term orientation such as Provident Fund (PF), superannuation,
company provided accommodation, Leave Travel Allowance (LTA), and loans.
Now, employees prefer more cash-in hand as it gives them the
flexibility to spend as per their aspirations and lifestyle.
"Companies need to be cognizant of the same and modify their
compensation structure and philosophies in line with the changing
expectations of the workforce", added Sambasivam.
"A healthy compensation and benefit structure should have a balance
between financial and non financial components and should be aligned
with the strategic priorities of the organisation," said Raghavendra K,
vice president and head, human resource development, Infosys BPO.
Source : The Economic Times
