Bangalore: Almost 25 percent of employers in India believe that their employees fail to fully understand the value of the benefits program provided to them. In a study by global consulting firm Watson Wyatt, it was found that there was a significant gap between the value of benefits provided by the employer and their perceived value by the employees.

The survey conducted across 12 countries in the Asia-Pacific region points out that over 40 percent of the employers in the covered region think that their employees do not appreciate the value of benefits provided to them. India also boasts of the second highest number of firms (79 percent) that have put in place a well-defined corporate benefits strategy.

More than 55 percent of the employers in China think that employees undervalue the benefits provided to them. In India, employers are more positive about the value that employees associate with benefits; as only about one-fourth think that employees undervalue the benefits given to them.

These findings have grave implications for companies on several levels - cost, employee engagement and attraction and retention of talent. With benefits costs facing a double digit growth, cost containment is a major challenge for organizations. "Especially since the cost of benefits could form anywhere between 10 to 40 percent of the total compensation package," said Kulin Patel, Head of Benefits Practice, Watson Wyatt India.

This also indicates that it is time for companies that are offering a fixed benefits plan to explore alternatives such as a flexible benefits approach as it has a strong advantage in helping employers build a more engaged workforce.