India Inc investing in employee benefits amid constrained budgets, rising premiums

Hyderabad: In India, there is a 110 per cent surge in companies offering comprehensive healthcare (preventive and primary), 15 per cent increase in companies offering maternity benefits, and also a two times uptick in flexible benefits adoption (insurance programmes that can be personalised by employees), a report said.

Plum, an insurtech platform released its flagship report, “The State of Employee Benefits 2024.” The study involving over 4,500 companies revealed that the median Sum Insured has risen 66 per cent from Rs 3 lakh to Rs 5 lakh. Amidst tight budgets, companies have aimed to continue investing in employee health and wellbeing.

Abhishek Poddar, Cofounder and CEO, Plum, said: “We are in an era where ‘modern benefits’ are equated to employer brand and employee retention. Our study reveals 76 per cent of employees weigh the quality of benefits as a factor to stay at a company or leave. Benefits have also evolved - it is no longer just insurance, but employee health and wellbeing that is a matter of concern for employers. Despite tight market conditions, it is heartening to see companies adopting sustainable policies.”

Poddar further said that the primary concern for most CHROs this year is the absolute spending on employee benefits. As 40 per cent of CHROs have observed that the business environment is impacting their benefits budget. That said, premiums on benefit plans are expected to increase by 11 per cent this year on account of medical inflation, does not make things easier.

The other trends observed in the report includes comprehensive covers from unicorns and global startups, global startups lead with a median sum insured at Rs 10 lakh, other smaller companies offer between Rs 1 lakh to Rs 6 lakh, Outpatient Department (OPD) benefits are gaining importance among unicorns at 30 per cent, maternity benefits average over Rs 1 lakh in global startups, Term life insurance is gaining prominence with Unicorns covering 75 per cent,

Telehealth services, crucial for preventive and primary healthcare, are almost universally included in global startups and widely incorporated across other firms, although specialty services may not be included in smaller companies.

Saurabh Arora, Cofounder and CTO, Plum said said, “Challenging market conditions should not prevent caring companies from offering tailored benefits. We have been collaborating with our clients to create sustainable policies that benefit both employers and employees.”