Why employee benefits matter beyond compensation

Organizations that invest in health, flexibility, development, and recognition for employees through comprehensive benefits programmes are setting themselves up to lead the future of work.

May 31, 2025 - 08:30

Why employee benefits matter beyond compensation

In today's evolving world of work, attracting and keeping top talent requires more than just a salary that’s credited to their accounts. While compensation is undoubtedly a key factor, employees are increasingly seeking a richer, more supportive experience in their professional lives. This is where employee benefits play a vital role in shaping workplaces where people don't just work—they belong and thrive.

Many organizations are unaware of the full range of employee benefits they can offer. This lack of awareness can lead to underutilized benefits and wasted investments. Smart employers recognize a well-structured benefits programme is an investment in talent and business growth.

Comprehensive benefits packages can include:

Health and wellness programmes

Initiatives that support physical, financial and mental health are an important investment for companies, because a healthy employee is a happy and productive employee. As per a recent report, 55% of employees emphasized mental health benefits as one of the top three most valuable benefits for making the workplace more empowering and inclusive.

Flexible work arrangements

Options that acknowledge the importance of work-life balance in today's world are a powerful incentive. Leading brands like Wipro recognize that flexibility is now a top priority for employees, surpassing even competitive pay. By implementing a hybrid work model, a global leave commitment, and a culture of trust, the company supports work-life balance without compromising productivity.

Learning and development opportunities

Programmes that fuel professional growth and demonstrate a commitment to employee development also play a key role in retaining talent. In India, Global Capability Centers (GCCs) are focusing on robust employee benefits mechanisms to attract and retain top talent, recognizing that a strong benefits strategy can position them as employers of choice.

Recognition and reward programmes

Initiatives that celebrate achievements and foster a culture of appreciation, makeing employees feel valued and seen.

Future-ready benefits

A digital-first, scalable benefits suite that includes traditional and new-age offerings, ensuresing businesses stay ahead of evolving employee expectations. A recent survey in India highlighted how 23% of employees believe that there is a need to provide benefits to unconventional caregivers like pet parents in future workplaces.

Unlocking the true potential of employee benefits

Employee benefits shape retention, engagement & productivity, by offering modern, comprehensive benefits and streamlining their administration, companies can:

Attract top talent: Stand out as an employer of choice by offering benefits that resonate with today's workforce.
Increase employee engagement: Foster a sense of belonging, boost morale, and motivate employees to excel.
Improve employee retention: Reduce turnover by demonstrating a commitment to employee well-being and satisfaction.
Enhance productivity: Create a supportive and positive work environment where employees can thrive. Research indicates that employees are increasingly looking for holistic support that addresses everything from immediate financial concerns to upskilling needs, emphasizing the role of comprehensive benefits in enhancing productivity.

A robust benefits package can help businesses attract and retain top talent, improve employee morale and productivity, and create a positive work culture.

In an increasingly competitive talent market, organizations that prioritize holistic employee well-being through comprehensive benefits programs are the ones that will lead the future of work. By investing in health, flexibility, development, and recognition, businesses can foster a culture where employees feel valued, supported, and empowered to perform at their best. Ultimately, employee benefits are a strategic lever for driving engagement, retention, and long-term business success.

(Suvarna Mishra is the HR Director at Pluxee India.)

Edited by Jyoti Narayan