Employee benefits: what shapes it and
what shakes it
Niranjan R | October 18, 2016

Employee benefits had their origins in 1944, where the Philadelphia Charter decreed that labour is entitled to a fair deal in any programme of economic development and social reconstruction. India, after it gained independence, adopted this practice of offering more than just wages to its labour force.

Today, the role benefits play is much more different.

They are a key factor in the employee recruitment process and over the years has evolved to become more monetary in nature.

But what are the factors that have shaped benefits to become what they are today? Here are a few:


The year 1991 was historic for companies in India for more reasons than one. It was when we began inviting organisations from other nations to set up offices here. For the employee, this meant a whole bunch of benefits that were previously unheard of, which dramatically altered the employee benefits space.

Change in Regulations

Regulations make the single biggest impact to corporate employee benefits programmes. The Maternity Benefits Act of 1961 and its subsequent amendments have made the workplace friendlier for female employees. For example, the recent amendment to the act gives all female employees a minimum of 26 weeks off. In contrast, American MNCs offer employees at their HQ only a fraction of that time as maternity leave.

Nature of the work

The nature of the jobs themselves influence the kind of benefits offered to employees. For instance, of the 26 allowances prescribed under the Income Tax Act, 10 are dependant on where the employee is posted by the employer. These include allowances for being posted in high-altitude areas, on remote islands, for work that takes place in mines, etc. Being paid extra to work from a remote location at Lakshadweep doesn’t seem like a bad idea, right?

What the workforce wants

Finally, a lot of what is offered to employees is a direct result of what employees want. Millennials at the workplace have heavily influenced workplace benefits. They were instrumental in introducing work-from-home policies. It’s also why the Zeta office always has fridges stocked with juice and stuff to munch on.

The list of factors that can influence employee benefits is certainly not a limited one. While these factors will continue to influence them, it would be interesting to see what employee benefits stand for 20 years in the future.

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