Who will flex the cat?
Flexible benefits for employees are gaining popularity across the world, and has got India Inc. interested, says a Mercer study.
Flex or Flexible benefits is a new terminology that is set to enter the Indian corporate lexicon. However, Indian companies are approaching it with some trepidation. “It is a question of who will accept it first,” says Rosaline Kow Choo, Head, health and benefit sector, Asia Pacific, Mercer Consulting.
So, what is Flex?
“Suppose you already have health insurance for your family—would you still want your office to cover you with the office plan or would you prefer to have something else instead of the double cover? The choice that you get is what Flex is all about,” she says.
Kow Choo says it is evident that most companies want to reduce costs in recessionary times. “Yet, they also face a problem of retaining talent as they know India will continue to face the battle for talent. This is where Flex can make it attractive for the employee to stay on.”
Kow Choo says that in the developed markets Flex often has a wide menu that may include reimbursement for an expensive sunglasses, dental braces or road toll paid for daily commute apart from usual stuff like reimbursement for professional courses. “The cost of medical insurance is increasing much faster than other things. But even if the company is paying for expensive medical insurance, the employee may not value that benefit so much. So such flexibility will always work,” she says.
She believes a company implementing Flex will create a menu from which employees can choose benefits every year. So, even if health insurance costs go up by 30 per cent, a company can increase its total Flex kitty by 15 per cent and let employees choose what they want. This way, while there may not be any costs savings in the first year—savings will happen from the second year onwards. The question is who will do it first in India?
Rosaline Kow Choo
“Suppose you already have health insurance for your family—would you still want your office to cover you with the office plan or would you prefer to have something else instead of the double cover? The choice that you get is what Flex is all about,” she says.
Kow Choo says it is evident that most companies want to reduce costs in recessionary times. “Yet, they also face a problem of retaining talent as they know India will continue to face the battle for talent. This is where Flex can make it attractive for the employee to stay on.”
Kow Choo says that in the developed markets Flex often has a wide menu that may include reimbursement for an expensive sunglasses, dental braces or road toll paid for daily commute apart from usual stuff like reimbursement for professional courses. “The cost of medical insurance is increasing much faster than other things. But even if the company is paying for expensive medical insurance, the employee may not value that benefit so much. So such flexibility will always work,” she says.
She believes a company implementing Flex will create a menu from which employees can choose benefits every year. So, even if health insurance costs go up by 30 per cent, a company can increase its total Flex kitty by 15 per cent and let employees choose what they want. This way, while there may not be any costs savings in the first year—savings will happen from the second year onwards. The question is who will do it first in India?
