Benefits in India

In India, training programmes are engrained in the culture of employers, while skilled workers in tight recruitment markets are being wooed with private health insurance, says Nick Golding

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It is common for many employers in India to pay INR 15,000 (around £170) to help staff offset any medical costs they incur. This is tax free for employers and employees, but many are beginning to take advantage of the new health insurance products that are starting to emerge.

Employees who have been at an organisation for five years are entitled to a tax-free bonus payment of 15 days wages for every complete year of service when they leave the company, whether due to redundancy or resignation.

Training and development is a key benefit in India. For many organisations it is part of the culture to help motivate staff.

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The healthcare benefits industry in India is an emerging market. While healthcare perks of some description are considered a given in most large organisations in the UK, in India, the concept is just beginning to take off.

Anita Belani, country head at Watson Wyatt India, explains: “The healthcare benefit is growing. It has started to become more popular, and over the past year has almost become the norm.”

In the past, the majority of Indian employers have offered employees financial assistance towards the cost of prescriptions and clinical tests. It is also common for staff to receive INR 15,000 (around £170) each year from their employer to offset their medical costs. This amount is tax free for employers and staff.

Over the past five years, however, the country’s health insurance market has begun to develop and some employers have begun to offer the benefit to staff.

HSBC, for example, offers health insurance to all of its employees based in India. Anirudha Sen, head of reward and employee relations, explains: “It is fairly common today. Historically, there were plenty of companies that wouldn’t have offered any health insurance, but many are now moving towards the benefit.”

Government-funded healthcare is of a poor standard, so this is another reason employers have started to look into providing healthcare for staff, many of whom have a real need of it.

“There are some government-run organisations but they are sub-standard, and you can wait and wait in line for your turn, and it will never come,” explains Belani.

This, coupled with the fact that healthcare costs in India are rising by 14% each year, means many firms are being forced to offer healthcare benefits if they are to remain competitive when it comes to the recruitment of staff.

But while the UK may have the lead on state-provided healthcare, India’s statutory benefits around pensions and long service awards, leaves us for dust. Its Provident Fund (PF) which legally binds employers to pay between 10% and 12% into an employee’s pension and requires an individual to put in 10% each month, proves that Indian employees are planning for the future.

“This is a defined contribution scheme, and the majority of organisations pay the 12%, although banking firms pay 10% each month,” explains Sen.

What is more, if an employee leaves a company after five years’ service, whether this is through redundancy or resignation, they are entitled to a tax-free bonus payment of 15 days wages for every complete year of service, up to a limit of INR 350,000 (approximately £4,080).

“This is not a massive benefit so it doesn’t necessarily encourage employees to move around too much, but it is meant to assist staff who have left a company and are looking for a new job,” explains Belani.

Another area that India is particularly strong on is learning and training for staff at work. This is extremely common and is engrained in the culture of many employers.

This emphasis has not gone unnoticed in the UK, as Lord Leitch’s report Prosperity for the global economy: world class skills, published last year and which focused on the need for UK employers to offer more training at work, notes that workplace training and development in India is embedded in the culture.

“Lots of the work that we do in India is learning-orientated, and employees value it because they believe that it gives them marketability,” explains Belani.

At HSBC, staff are encouraged to take part in courses from the day they are recruited, and the training of staff is conducted strategically. The bank offers training around basic products for new recruits through to leadership and management training for more senior employees.

“It is a motivation factor. We offer regular on-the-job training. It is part of what we do, and it is really well entrenched at HSBC,” says Sen.