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Pharma and healthcare employees prefer variable pay and flexi benefits along with salary increments

Nandita Vijay, Bengaluru
Thursday, February 15, 2018, 08:00 Hrs  [IST]

Pharma and healthcare industry’s employees and employers seem to be moving towards total rewards wherein the share of variable pay and flexi benefits are significant. The two sectors employ a bigger pool of mid-level professionals who have a rationalized compensation and hierarchical profiling which shows up sharp increase in variable pay.
 
The variable pay for senior management has risen to 25%-30% from 18% - 20%. Similarly, there has been a significant rise in the middle management from 10% - 12% earlier to 18% - 20% today as well as the junior management where it was 05% - 08% earlier to 10% - 12% currently.
 
The changing dynamics of the job industry seems to be impacting the rewards and compensation structure, states TeamLease Compensation & Total Rewards Trends Report.
 
It indicates that not only variable pay even flexi- benefits are gaining momentum and becoming a critical component of total rewards. These are  yielding higher value amongst employees, lower costs for employers, and better tax benefits.  The cost to the business in providing flexible benefits is 25% of the total HR budget, which is around 10-15% of the employees’ total salary package. However, the perceived value of these benefits is nearly 42% of the compensation package and hence new-age companies are innovating to keep employees happy. Professional development and educational benefits are most preferred benefits for employees followed by pay raise, healthcare plan and performance bonus amongst others.
 
Commenting on the report, Sonal Arora, vice president, TeamLease Services, said, “While flexi benefits have become a popular medium to please and retain employees, organizations need to be honest with their intent, and prioritize on aligning rewards with business objectives.”
 
The detailed report elaborates that variable pay and long term incentives gain more currency as one goes up the hierarchy. The traditional sectors like healthcare & pharma, offer a wide range of options in the compensation & benefits mix, to cater to a broad-based workforce.
 
Another interesting finding that the report showcases is how the reward value retention is perceived differently by employees and the employers at different stages of the employee cycle. While attracting the employee to a new job, the employer thinks of career advancement as the most important criteria but for  an employee it is the salary which  attracts him  to the new job.

 

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