Companies using retirement benefits to boost talent retention

Employers are increasingly using retirement plans as a top benefit to retain employees, says a survey.

According to the Global Benefits Attitudes Survey, conducted by global professional services company Towers Watson, employer retirement plans have emerged as the top source of income for retirement for many employees.

Besides employer retirement plan, other sources of income during retirement are savings or investments and property.

Interestingly, retirement benefits are emerging as an important retention driver. Only 12 per cent of employees, who agree that their retirement plan meets their needs, plan to leave their organisation in next two years as against 39 per cent of those who disagree with their existing plans.

When given a choice between a better retirement provision and larger base pay, employees have begun opting for generous and guaranteed retirement benefit, the survey said.

"As the war for talent intensifies, retirement benefits have emerged as a powerful tool to boost employee retention and given its growing importance, progressive employers will re-examine the total rewards mix and leverage such benefits as a differentiator," Towers Watson India Director, Benefits, Anuradha Sriram said.

However, when given an independent choice between the various components of rewards, Indian employees still prefer a larger base pay hike across all age groups, signalling a visible need for employers to enhance retirement education and help employees understand the value of retirement benefits.

With a majority of Indian employees expecting to retire around 60, despite a high savings rate, a large number are not confident of affording a long spell of retirement.

"Traditionally, retirement planning has never been an important financial priority owing to Indian family structure and elders' dependence on their children," Sriram said.

"However, the breakdown of traditional support systems, increased longevity, rising inflation and rapid urbanisation now require a large proportion of the current working population to build their own retirement corpus," she added.

Towers Watson's Global Benefits Attitudes Survey examines employees' attitudes toward health and retirement benefits.

Conducted in 12 countries, the survey was completed by 22,347 employees working in large non-governmental organisations, including 2,006 employees in India, of whom 1,669 are members of a retirement savings plan.