It’s no secret that employee retention is equally a cause of constant deliberation for business leaders as is their company’s bottom line. A recent survey by Fortune Magazine substantiates this further with its finding that 87 percent of employers prioritize employee retention as a critical function of their organization.
Working Professionals today are generally confident that if they lost or quit their job, they are likely to find a new job that matches their current pay in relatively less time. Millennials especially are easily able to move in and out of companies as they do not seem to have job satisfaction, which can range from not having a work-life balance to flexible hours, to understanding bosses among others.
As an employee yourself, you may have often wondered how much your own company values you and considered all of the above or more factors while coming to a conclusion.
While many employers are now working constantly to reorient workspaces through employee wellness programmes, very few of them are working on improving compensation and reimbursements that make the take-home package attractive enough for existing employees to stay.
Employers have for long overlooked the benefits of flexible benefits or employee tax benefits while structuring or re-structuring CTC.
The Mighty Tax Benefit
Tax benefits such as meal vouchers, reimbursements on medical, fuel, mobile bills and so on can potentially save an employee more than Rs.80,000 annually, and that’s without virtually any cost added to the company’s payroll. In fact, that figure goes up marginally if companies provide and employees opt for the full range of benefits that are provided for by the Income Tax Act. This is in addition to the Rs. 1.5 lakh potential annual savings already included under investments in Section 80C. That’s immense potential for employees and companies to tap into.
In an earlier survey by by Glassdoor, 60% of employees indicated employee benefits and perks as a major factor that was kept in mind while negotiating a job offer. The survey also highlighted that 80% employees preferred additional benefits to pay raises.
These facts throw light on the fact that employees all over the world are getting conscious about tax-saving. Information about taxes is more easily available now than ever before. That is exactly what is needed in India, considering our tax system can be a complex beast to understand. Since employees are decidedly more convinced about tax benefits now than ever before, it should not t be a mere obligation on the part of the organizations to fulfill, but more of an active retention strategy to roll out consistently for everybody.
Not to mention the added benefit for the company, that they’re just helping employees save their own tax money, and without disturbing the company cash box. One wonders then why a company would not be using this to make employees happier by increasing their take-home salary even if their CTC does not change. It’s lean practice and its downside is nil.
Some benefits at a glance:
- Meal Vouchers
- Medical Reimbursements
- Fuel Allowance/ Driver’s Salary
- Leave Travel Allowance
- Mobile Reimbursements
- Gift Vouchers
Easy Delivery of Benefits
Traditionally speaking, the process of signing up for and encashing their tax benefits has never been a pleasurable one for the employee, to say the least. Even as much as a decade ago, there were problems with disbursement, and a lack of understanding of the system, which may have been the cause of frustration for both payroll and employees. The delivery of these benefits was rife with problems very cumbersome in nature. So now, a case has to be made for that.
Thanks to technology the hassles of Employee Benefits are a history. Digitisation has lifted a majority of the obstacles, making it easier and quicker for an employee to sign up for tax benefits and receive them. For employers to the administration of said benefits is at the click of a mouse, giving companies to chance to save considerably reduce overhead costs incurred on manpower, logistics, and storage. Optimising overhead costs, as well as talent retention, play a key role in the profitability and success of any company. With working professionals no longer associating long stint at work as an achievement, companies have to work on talent retention strategies as enthusiastically as they work on talent acquisition. Even the most desirable companies in this day and age are working extensively on to make workspace as attractive as they can because valuable talents bring best results to the company.
(With the appraisal season not too far, People Matters brings to you a series of articles to help you prepare for the season.)