Mumbai: Cash is King. This is also true in compensation structure of employees as most employees, across generations, prefer a higher ‘in-hand’ pay as compared to other components of salary. Nearly 40% baby boomers, 56% Gen X and 41% Gen Y workforce seek better take-home salary, finds the latest TimesJobs survey.
The survey revealed that the need for greater cash-in-hand component is more at the junior level, with nearly 60% of the junior employees seeking more in-hand salary. Rising inflation and increasing cost of living may be possible reasons for employees how they perceive the compensation structure. The TimesJobs.com Compensation and Benefit study surveyed over 1,000 employers. Although 70% of organizations say that there is a distinct difference in preference for compensation components among various generations, take-home salary has emerged as the common preferred salary component among employees.
“While ‘take-home salary’ remains of prime importance in evaluating compensation, other factors, such as growth prospects, future earning potential, performance based allowances, ESOPs, housing, schooling, medical, and other benefits play an important role as well. TimesJobs has created a vast database of company reviews by genuine employees and industry scale salary benchmarking tools that give insights into a company’s compensation philosophy, allowing candidates a transparent view into potential employers,” says Nilanjan Roy, Head of Strategy, Times Business Solutions.
On the securing the future benefits, according to our survey, baby boomers, owing to their proximity to retirement, give more importance to post retirement benefits after the in-hand salary in their compensation and benefits package. Nearly 38% baby boomers are interested in retirement benefits. Surprisingly, post-retirement benefits are the second most sought compensation component for Gen X and Gen Y workforce as well. Nearly 26% Gen X and 23% Gen Y workforce also seek retirement benefits from their salary package. This bursts the popular notion that the younger workforce generations are not concerned about securing their future and only want quick monetary benefits from their job.
According to the survey, organizations also give priority to different aspects of compensation & benefits depending on whether they are hiring a new employee or retaining an old one. The theory of ‘one size fits all’ is not applicable as managers have to factor in business needs and diversity in employee preferences. Almost 90% employees prefer a customized compensation package. Their priority of what is more important to them depends on the stage of their career and their age.
“Organizations must consider tailoring their compensation structure for employees. But to do so they must understand the unique attributes and aspirations of the different workforce generations. To effectively manage a multi-generational workforce, the employers must start by getting to know the expectations of their workforce,” says Nilanjan Roy, Head of Strategy, TimesJobs.
Overall compensation structure, CTC as it is called, is what matters the most when hiring a candidate, say 58% employers. This is followed by in-hand (monthly) payout (20%). On the other hand, when retaining employees monetary components take a back seat. It is in fact, career growth paths, which matter most while retaining employees, say 56% employers. This is followed by the overall compensation structure (16%) and other benefits and perks (14%).
