Evolution of Compensation and Benefits in Industrial Machinery Manufacturing

Abhishek engaged in a conversation with the Industry Outlook magazine in order to answer queries on the evolution of compensation and benefits in industrial machinery manufacturing. He is currently serving as Director of Rewards-detection for APAC for Smiths Group and  has close to twenty years of experience and expertise in compensation management and related HR systems.

How are compensation and benefit structures evolving within the industrial machinery manufacturing sector to attract and retain skilled professionals?

When we talk about compensation and benefit structures, the key point that the industry is moving towards now is providing more flexibility in the hands of employees. Employees get to take a call whether they want to take compensation or they want to invest more on retirals e.g PF or NPS or any similar benefit. Basically, what we are trying to do from a compensation perspective is to give employees the option to make their structure as tax friendly as possible because of taxation being high. Employees are looking at maximizing their earnings.  In such scenario, a tax friendly structure becomes one of the most important aspects.

Secondly, it is not only compensation that people are looking at right now but also a lot of other aspects that are revolving around the benefits. These can include wellness programs, insurance programs and anything else that goes beyond the compensation provided. Benefits are becoming more important now because people are slowly able to understand how the industry is evolving and why one has to invest on retirals. Having said that, the benefits do not stop at the employee but they are also being extended towards the family members as well. The benefits and compensation structures that we are following  are based on a holistic approach where people are being given the option to figure out how the package needs to look like.    

What key challenges do industrial machinery manufacturers encounter when crafting competitive total rewards packages for employees, and how are these challenges being addressed in the industry?

One of the biggest challenges that we are facing today is competition. With initiatives like "Make in India" and FDI happening in India, a lot of competition has sprung up. The capital that is out in the market which is being given out to employees is huge and includes stock options as well. Competition is a factor that is playing a major role over here and every six months the depth of it needs to be checked by organizations. Apart from this, the laws of the country are also quite dynamic and are changing from time to time. Previously, the laws used to be business centric but now they have become more employee centric. We can see that minimum wages are going up every six months and the industry is also changing the compensation structures according to that. There is a lot of competition arising in coaching employees and the industry is facing several issues and challenges in this regard.

Can you highlight any innovative strategies adopted by leading industrial machinery manufacturers to enhance their total rewards programs and drive employee satisfaction?

Some innovative strategies have been used to benefit employees. We are not only concentrating on the compensation aspect of it but also the benefits of employees. We are going heavy on benefits and trying to figure out what more can be provided to employees in this regard. Be it in terms of insurance policies or wellness programs, organizations are trying to provide employees with value added benefits. An important aspect that we are looking at is work-life balance. Today, people have the required money and time and investing in their work but it is also important to look at the other aspects of life as well. What the industry is trying to do is harmonize and find the best way to give EVP to an employee. In this regard, we are also looking at streams that are linked to productivity. We are looking at retention bonuses that can be given to employees who have been there with the company for a long time and sometime go out of the norms and provide them with a differed compensation. This is only to develop a sense of belonging in the employees towards the company.

Considering technological advancements and shifting workforce dynamics, how do you foresee compensation and benefits strategies evolving in the industrial machinery manufacturing industry in the coming years?

Previously, there were companies concentrating a lot on employees. Now, we can see a lot of technologies coming in and people getting more access to knowledge and information irrespective of their socioeconomic backgrounds. The focus has now shifted from just being on the employees to the environment that is provided to them. The industry is concentrating on the growth of the employee, the family of the employee and it is trying to use technology as much as possible for that purpose. If benefit schemes are being rolled out in terms of insurance or wellness programs, organizations are trying to work with vendors who can provide smart applications on them to be used in mobile phones. Technology is playing a vital role when it comes to communication with the employees. It has been one of the best processes through which organizations are able to understand employee requirements and act accordingly.