Compensation is a systematic approach to providing monetary value to employees in exchange for work performed.
• A survey by the Society for Human Resource Management (SHRM) found that the most valued benefits among employees include healthcare coverage (88%), retirement savings plans (79%), paid time off (75%), and flexible work arrangements (66%).
• According to the 2022-2023 Aon India Salary Increase Survey, India’s projected average salary increase for 2023 is 10.4%.
• According to the Aon India survey, the average variable pay as a percentage of the fixed pay in India is projected to be around 16.1% for 2023.
Challenges:
Compliance and Regulations: As of September 2022, the minimum wage rates ranged from around INR 2250 to a maximum of INR 70,000 per month, depending on factors such as skill level, location, and industry.
Pay equity: According to the Monster Salary Index (MSI) India 2022 report, the gender pay gap in India stood at around 19%, indicating that men earned a median gross hourly salary of Rs 288.68, women earned only a median gross salary of Rs 207.85 per hour.
Employee communication and engagement: According to the Gallup State of the Global Workplace report, as of 2022, only 21% of employees in India were engaged in their work. A survey conducted by Willis Towers Watson in 2022 identified some of the top communication challenges which included communication overload (72%), lack of consistent messaging (59%), and difficulty in reaching employees in remote locations (56%).
Budget Constraints: According to the 2022-2023 Aon India Salary Increase Survey, India’s projected average salary increase for 2023 is 10.4%. According to the Aon India survey, the average variable pay as a percentage of fixed pay in India is projected to be around 16.1% for 2023.
Best practices:
Profit-Sharing: The company contributes a portion of its pre-tax profits to a pool that gets distributed among eligible employees.
Corporate Discounts: Discounts offered to employees on the employer’s original price of goods or services.
Retirement Plans: The compensation package is providing full-time employees with financial security through various methods like pension plans, and 401(k)s.
Stock Options: Employees have the right to buy shares in the company at an agreed-upon price by a particular date. This price is generally lower than the market. This helps employees have ownership over something they are also working to build.
Wellness Programs: Wellness programs are initiated by the company to encourage employees to maintain a healthy lifestyle which includes programs such as gym memberships, weight-loss competition, smoking cessation, and health screenings.
Entertainment subscriptions: Employees with free access to Netflix or Amazon. It is not enough to only cover the health and learning perks; make sure that employees can have fun too through a monthly subscription to entertainment platforms.
Conclusion:
By offering a mix of Corporate Discounts, Retirement Plans, Stock Options, equity, and profit sharing, one can create a compensation package that rewards employees who drive results and helps to retain top talent.