Attracting top talent and retaining high-value employees are two of the biggest operational challenges for businesses. Back in the day when pay disparity was common, paying high salaries was a sure-shot strategy to get the best minds in the industry. But companies are not shying away from matching compensation that candidates are getting from their rivals. It has forced companies to come up with other innovative ways to provide attractive benefits like gift card vouchers to improve employee satisfaction. One strategy that is working wonderfully for companies is the Flexi Benefits Plan (FBP). It is gaining significant prominence as one of the go-to employee benefits in India.
Implementing flexi benefits involves quite a bit of planning, research, and nuanced execution. If you are new to FBP strategy, read on as we explore its benefits and how misconceptions are hurting the success of flexi benefits.
The Flexi Revolution: Tailoring Benefits for Today’s Workforce
Flexi benefits plan is more than rage as it presents an easy option for companies to offer employee benefits in India. Let’s understand how you can tailor benefits for your employees.
- As an employer, your goal must be to maximize the usage of flexi benefits plan instead of limiting it to gift card vouchers, and an efficient design is a good first step toward that. To ensure that your plan aligns with employee expectations, you can take their feedback or suggestions through surveys or discussions.
- Once you design your benefits plan, it is crucial to communicate the changes or updates to your employees. Since you divert a portion of their salary for these benefits, employees will get a lesser salary. If you don’t educate your team about the same, it could lead to widespread dissatisfaction.
- Before you roll out the plan, you must get a buy-in from your employees. Their enrollment in the available benefits and suiting their personal preferences will directly impact the program.
- On the administration side, you must take utmost care in restructuring the salaries of your employees as per the flexi benefits plan. Doing this manually could lead to operational complexity. You can simplify the process through a digital solution like Zaggle Save.
Breaking Stereotypes: Dispelling Misconceptions About Flexi Benefits
Attempting employee benefits in India comes with reservations about the budget, approach, and execution, making it seem more difficult than it is. Companies mostly limit these benefits to gift card vouchers. Let’s debunk some of the misconceptions about flexi benefits.
One-size-fits-all approach: Companies that fail with flexi benefits schemes tend to have a single plan for all their employees like gift card vouchers. Every employee is different with a different set of expectations and preferences. You need to consider the diverse needs of your team when designing a flexi benefits plan.
Fear of higher costs: Since it involves accommodating a variety of employee expectations, companies assume that it may automatically lead to budget overshoots. However, that’s not the case. After the initial setup costs, flexi benefits plan remains pretty cost-effective.
Challenging to manage: Managing multiple benefit plans and modules may seem like an operational nightmare. It is only tough when you try to run the administrative tasks through manual processes. Most companies adopt robust expense management software like Zaggle SAVE to streamline employee benefits in India.
Flexi benefit plans are self-explanatory: Lack of communication presents a challenge for any business or administrative operation. The same goes for the success of employee benefits. Companies may think that these benefits will be understood inherently leading to confusion and misinterpretations.
Not considering legal or tax implications: Companies usually fail to understand the compliance issues that they could run. Employee benefits in India like gift card vouchers could be linked to legal and tax considerations.
A Magnet for Talent: Showcasing Flexi Benefits to Attract the Best
Flexi benefits plan involves personalizing salary components of your employees as per their needs and interests. Employee benefits in India come with tax savings as they’re considered investments under sections 80C and 80D of the Income Tax Act. Some of the allowances that get your employees tax breaks include food expenses, mobile bills, travel expenditures, and education allowance.
| Allowances* | Monthly | Annually | Tax Savings/Annum | ||
| Slab-1 (5%) | Slab-1 (20%) | Slab-1 (30%) | |||
| Meal Card | 3,500 | 42,000 | 2,100 | 8,400 | 12,600 |
| Fuel Card | 2400 | 28,800 | 1,440 | 5,760 | 8,640 |
| Gift Card | 5,000 | 250 | 1,000 | 1,500 | |
| Telecom | 1,000 | 12,000 | 600 | 2,400 | 3,600 |
| Attire/Uniform | 1,000 | 12,000 | 600 | 2,400 | 3,600 |
| Books & Periodicals | 1,000 | 12,000 | 600 | 2,400 | 3,600 |
| Total Allowance | 8,900 | 1,11,800 | |||
| Total Tax Saved | 5,590 | 22,360 | 33,540 | ||
One additional benefit that flexi benefits strategy has to offer is financial health for your employees. By tailoring benefits, you can prioritize their interest and introduce financial discipline. Having a fixed allowance for each category sets a spending limit, which ensures that they plan their expenses properly.
Flexi benefits plan can help you stand out especially if you are a startup or SME and want to recruit the top talent in the market. Since it offers greater control over how their compensation is structured, candidates are likely to show affinity towards joining your organization. It will also help you retain your key players without having to go beyond your budget for a resource. All you need to do is make some optimal adjustments and satisfy their salary needs.
Designing the best flexi benefit plan with Zaggle SAVE
Diversity is the way to go when implementing flexi benefits plan. However, it comes with its challenges like having to manage multiple plans. Also, your employees will end up having to carry multiple cards for each allowance component. You can avoid this hassle with Zaggle SAVE. A leading provider of employee benefits in India, it offers a single card to replace all the paperwork with digital processes. It streamlines flexi benefits plan and your employees will just have to carry one card that can be used for meal purchases, fuel charges, mobile bills, and so on.
