India Inc. Prepares for a Long Innings
It is interesting to note that key talent attrition has moved up. In 2014, it was at 5.9% vs. 4.5% in 2013. While organizations have not jumped at the positive sentiments in the market and have not gone all out on hiring, they have definitely started looking out for better talent available in the market. The services industry has been hit hardest by this phenomenon. Particularly, ITeS and hospitality have key talent attrition in the 9%+ category, which is a big concern. Manufacturing firms on the contrary continue tokeep their key talent attrition at bay.
Total Rewards: The Time has Come
With the increasing pressures on the salary budgets, organizations are now taking a holistic approach to rewards. Firms now focus on other aspects of rewards apart from compensation. They have increasingly started listening to their employees, focusing on engagement scores and employee preference surveys to understand the pulse of the workforce and provide solutions that help improve the employee's lifestyle, without increasing the compensation budgets. Of the 500+ organizations that were surveyed, 76% have indicated an increase in their overall benefits budget. The changing demographics, spanning across Gen X, Y and Z have forced organizations to drop the one-size-fits-all' approach. Employee preference is now an additional factor considered when designing benefits program for the workforce. Employee wellness and health benefits are gaining significant momentum. While salary-linked benefits (retirals) are mandatory, firms are designing bespoke benefits plans to meet separate needs of Gen X, Y and Z. Therefore, flex-ben has been taken up quite seriously by many firms. The number of people availing these benefits has also seen an increase from the years before. Benefits have been identified as one of the key retention measures apart from compensation. In spite of the efforts made by organizations to build customized rewards solutions for their employees, the perceived value of the rewards is restricted to compensation. Organizations are now increasingly focusing their efforts to develop an effective communication program to enhance employee appreciation of the Total Rewards paradigm, rather than the traditional mindset that cash is king.
The Match is Yet to be Won
We believe that the industry's response to the economic sentiment and reform-led growth outlook has been sustained, steady and systematic. This augurs well for a country that is increasingly bringing in maturity in its orientation towards rewards, retention and performance differentiation. It also makes sense as some organizations believe that the positive business sentiment and market buoyancy is yet to take shape in the form of a spurt in actual business most believe this to become a reality in the next 6-8 months. And even if the evidence of a strong economic upturn emerges sharp and clear, India Inc. would do well to keep humility and prudence at the forefront of its rewards strategy, and be mindful of the scars that previous profligacies have left. Team India may have bowed out of the world cup after a thoroughly professional performance, but India Inc. needs to maintain the focus and the mindset to win the longer term battle of people and profitability as the good days start to shine, sooner than later.
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