FMCG Sector: On the Road to Revival
fact that while off ering hefty cash pay would initially attract
job seekers, but what would make them stick around is a
robust and well-bundled basket of employee benefi ts. 80%
employees feel benefi ts are an important retention lever.
Benefi ts have emerged as the top retention measure for top
management employees. With over 70% organizations in
India and over 80% of the fi rms in the FMCG sector having
revised their benefi ts budgets upwards in 2014 as compared
to the previous year, the case for focus on employee
benefi ts keeps getting stronger by each passing year. A
majority of the employees today want fl exibility in benefi ts
with a menu option and are even willing to make voluntary
contributions to get access to certain additional benefi ts.
Despite the buzz about the importance of benefi ts,
when we take a closer look at the break-up of fi xed pay in
the FMCG sector, cash still emerges as a major rewards tool,
contributing to over 80% of the total fi xed pay across levels.
Graph 6
Even though most organizations provide a wide
plethora of benefi ts ranging from retirement benefi ts, car
related benefi ts, housing and healthcare, yet this takes up
a very small portion of the pie, with majority of the funds
still being parked in cash components.
Which benefi ts are then the fl avors of the season?
Firms are looking at giving employees the power of
choice and providing much more than livelihood benefi ts
which the cash salaries are able to cover for. What
employees really value are benefi ts that one may not be
able to attach a monetary value to whether it be fl exible
working hours, enhanced maternity and paternity leaves,
option of remote working, health and wellness initiatives,
among others. The phenomenon is beginning to catch
up with the FMCG majors who no longer see this as a
softer investment but a hard coded business imperative to
ensure that they not only have onboard the brightest but
the ones they have are healthy, productive and engaged
to drive key results for the organization.
Where are We Headed?
The first quarter has been rather slow for the sector due
to subdued demands from the urban as well as rural
markets. While experts remain bullish on the performance
in the medium to long-term, some immediate reformist
measures seem essential to translate the feel-good factors
into tangible market results. This is bound to bring back
prudence at the forefront of rewards managers' white
boards. Having said that, there will be skills sets that will
be in demand and will in turn command more premium
than the others. As digital becomes the all-pervasive
phenomenon, marketing professionals in general and
digital marketers specifically will rule the roost. These
along with the Men in Black manning the Corporate Aff airs
and Liaising teams will continue to see being paid for the
value they bring to the table in the increasingly tightening
marketplace - competition-wise and regulation-wise.
Organizations in this sector have come a long way in
terms of people and rewards practices and most have
a developed rewards philosophy in place. Considering
the business environment, rewards diff erentiation,
segmentation and communication will be more important
than ever before. A mature sector has its own set of
challenges to deal with, and the smarter players in the
FMCG sector will have to brace up to overcome these as
they navigate the human capital marketplace deftly and
diligently.
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