India has one of the largest workforce in the world. With employees being the pillars of any successful company, it is important to make sure that they are provided with adequate employee benefits to ensure they are happy.
Employee benefits in India can be significant as a vast majority of the Indian working population are employed in the service sector and providing employee benefits can make them feel they receive value from their work. Employee benefits like corporate wellness programs show that the organization values and cares about the employees.
Read more about designing a wellness program for employees using our corporate wellness program guide.
Importance of employee benefits
Employee benefits are the non-financial benefits provided to employees apart from their salaries. Some employee benefits are governed by laws like group health insurance, retirement benefits etc. Other benefits include gym membership, paid vacations, employee health and wellness initiatives. These benefits will satisfy the employees and make them feel content.
These employee benefits can boost their productivity and make them focused on the long term goals of the organization. They can improve employee retention and create a sense of loyalty among the employees towards their organization. Employee benefits like employee wellness programs can reduce their stress and make them more proactive.
In the present scenario, you can also provide them with group health insurance policies that covers the coronavirus insurance under the employee benefits plan. It can help them financially during this pandemic and cut down their stress during emergencies.
Types of employee benefits
The employee benefits in India can range from providing employer paid health insurance during the working period to providing retirement benefits to the employees. Let’s dig deep into the employee benefits provided in India.
Paid leave in India
The organizations in India provide paid annual leaves, sick leaves and maternity leaves. Sometimes the untouched leaves can be carried forward to the next working year and taken during the time of need.
Paid maternity leave in India
Under the Maternity Benefits Act, maternity leave has been increased from 12 weeks to 26 weeks. Eight weeks of prenatal leave is provided for the employees. A woman with already two more children is eligible for 12 weeks of maternity leave. Apart from this adoption leave of 12 weeks is provided for adopting babies less than three months of age.
Read: Maternity insurance
Group health insurance for employees
Providing group health insurance is the most common yet valuable employee benefits. They can be costly but it can be of great importance to the employees. The group health insurance plans include reimbursement of medical bills, annual health check-ups, domiciliary hospitalization, etc. The group health insurance policy covers the employees and mostly it also covers their spouses, children and their dependent parents. Usually the sum insured in a group health insurance plan for employees is between 2 lakhs to 5 lakhs.
Hence, providing group health insurance policy as a benefit will greatly help the employees as it will reduce their financial burden during medical emergencies. Moreover, as per the post-lockdown Covid-19 operating guidelines providing health insurance for employees has become mandatory. To know more about group health insurance and its benefits, take a look at the group health insurance guide curated by Pazcare.
Read: The EDLI scheme
Retirement benefits in India
Retirement benefits in India include Employees Provident Fund(EPF), Gratuity, pension plans in India etc.
Employees Provident Fund(EPF)
The Employees Provident Fund(EPF), is governed by the Employees Provident Fund and the Miscellaneous Provision Act. The EPF is a part of social security contributions.
According to this act, the employees who are eligible for the PF act have to contribute a fixed amount of 12% of their salary to the Employees Provident Fund. The employer also contributes 12% of the basic salary of the employee, out of this around 8.33% contributions go to the pension fund.
The Gratuity Management Act governs the Gratuity employee benefit. Gratuity amount is the amount paid by the employers to their employees in return for the services they offered to the company/organization. The employee must be involved with the company for a minimum period of 5 years to avail gratuity. The gratuity calculation formula is
G = N*B*15/26
G is Gratuity, N is Number of years served in the company and B is Last drawn salary along with dearness allowances.
Check out : Gratuity calculator
Pension plans in India
Only a few private organizations offer pensions as employee benefits to their employees. Pensions plans in India are like an investment plan where a part of the employees regular income is invested in a plan that provides income after retirement. This is divided into two namely the accumulation stage and vesting stage. In the accumulation stage the employee pays a part of his salary until his retirement and in the vesting stage the employee or the nominee (after the death of the pensioner) receives the pension.
Monetary and non-monetary benefits
When employees work with their organizations for a specific period of time, the company shares its profit with the employees. This will be mostly in the form of bonuses.
Non-monetary benefits include providing food coupons, company car, accommodation, and other benefits which can be essential for the employees in their day-to-day needs.
Benefits at work
You can provide different work-related benefits for your employees. Out of these providing flextime and skill development programs can be of a great deal to the employees.
Providing flextime to the employees creates a healthy work-life balance. It enables them to decide about their working hours and the location from which they wish to work. This can largely increase the productivity of your employees.
Skill development programs
Offering skill development programs for your employees will not only help the employees but also the organization. The employees can be well-equipped with the skills required in their respective fields and the company can stay competitive in their industry.
Tax-saving employee benefits solutions
Did you know that in the financial year 2020-21, more than 8.1 crore Indians, mostly salaried individuals, paid their income taxes?
For instance, under Section 17(2)(viii) of the Income Tax Act, food allowances provided during working hours, up to Rs. 50/meal, are exempted from taxes. By offering two meals a day on 22 working days a month, an employee can save up to Rs. 2,200 per month or Rs. 26,400 per year in taxes.
Wellbeing programs for employees
Many organizations have started to provide health and wellness programs for employees realizing the importance of the mental and physical health of employees. They include meditation services, therapies for stress management, Yoga programs etc.
The physical health management is carried out by providing gym memberships, access to fitness apps etc. In most the wellness programs for employees is either fully funded by the organization or it is split between the employees and the organization.
Important employee benefits that are valued among different generations
Today most workplaces have different generations of people working. This means different generations of employees have different requirements. So, different generations of employees value different benefits.
For instance, a Generation Z employee may value flextime over retirement benefits, whereas a Baby Boomer may appreciate retirement benefits.
According to the Benify study, employee benefits are categorized into two.
- the one's employees consider important
- the employee benefits they appreciate the most.
According to the study, among older employees, retirement benefits and pension plans are important. On the other hand, developing new skills is important for the younger generation employees. However, working hours and leave are considered important among all the generation workforce.
Now, when we consider the employee benefits appreciated by the employees, most people value non-monetary benefits like food and beverage. However, every generation of employees appreciates health and wellness programs offered by the employer.
Get your employee healthcare benefits from Pazcare
Nowadays the employees choose a job which provides them with benefits like health insurance, wellness programs etc. So make your workplace the best of best by providing your employees with tailor-made group health insurance policy. Not only that you can provide them with health and wellness programs like unlimited doctor consultations, therapy sessions, regular health check-ups, healthcare workshops and webinars, and many more at discounted prices. You can step up your employee healthcare benefits by providing them with group accident policy and group term life insurance. And the best part is administer all these benefits at a single place using the Pazcare dashboard for admin/employers.
Have a question? Talk to our sales team and get started with your employee healthcare benefits journey.