Rising costs force Indian firms to rewrite employee benefits

Indian companies are rethinking the benefits they offer their staff, such as healthcare, retiral plans, well-being perks, and leave, as they seek to control budgets while retaining top talent without compromising on employee experience.

- Anshika Kayastha & Devina Sengupta

The move comes as employee costs escalate, and health insurance premiums balloon, prompting firms to redesign their benefits programs to align with the needs of a multi-generational workforce and ensure financial discipline.

“Rising costs—driven by medical inflation at 11% outpacing general inflation—are compelling organizations to optimize benefit strategies without compromising employee experience. The true cost of benefits depends on utilization, prompting a recalibration of what remains standard versus what becomes flexible,” said Vinod VK, head of health and benefits, India, WTW, a global advisory, broking and solutions company.

Companies are phasing out benefits like telemedicine, which was indispensable during the pandemic but no longer essential, as they seek to cut unnecessary costs, he said.

WTW’s Benefits Trends Survey 2025, shared exclusively with Mint, shows that 55% of the more than 500 employers studied in India underlined that the pressures of rising benefit costs on budgets are a "key business issue". About 38% said that financial constraints are limiting their ability to deliver on wellbeing programs, while 34% acknowledged that a tighter budget impacted health benefits offered to employees.

To be sure, technology is reshaping employee profile, prompting companies to look at their benefits programs through a new lens.