The retention problem is a benefits problem
India's attrition rates across technology, BFSI, and professional services have stabilised from the post-pandemic highs, but voluntary turnover remains significantly elevated compared to pre-2020 norms. Exit interviews consistently surface two themes: better compensation elsewhere, and a sense of not being valued.
HR leaders often treat these as separate problems — compensation is Finance's domain, and "feeling valued" seems too soft to operationalise. But research from Mercer and Willis Towers Watson consistently shows that well-designed benefits programmes address both simultaneously. Employees who feel their health, financial security, and wellbeing are cared for by their employer report higher belonging scores and lower intent to leave — even when competing offers are financially similar.
What employees actually want in 2026
Benefits preferences have shifted significantly since 2020. Based on Onsurity's data across 8,000+ businesses and our annual employee benefits survey, the top-ranked benefits Indian employees now want are:
- Comprehensive health insurance — covering family members, with no sub-limits and minimal out-of-pocket costs
- Mental health support — teleconsultation with therapists and psychiatrists, without the stigma of going through HR
- Flexible work arrangements — not strictly a "benefit" but perceived as one
- OPD and preventive care — doctor-on-demand, pharmacy discounts, and annual health check-ups
- Financial wellness — term life cover, accidental insurance, and access to salary-linked credit
Notice that five of the top six are health and wellbeing related. In previous decades, employee benefits in India meant a Diwali bonus and a subsidised canteen. The expectation has fundamentally changed.
The economics of benefits vs. salary hikes
A salary increase is expensive in two ways: it raises the base permanently, and it increases the PF contribution for both employer and employee. A benefits package, by contrast, is typically a fixed annual outlay that doesn't compound into the salary structure.
Consider a software engineer earning ₹12 lakh per year. A 10% raise costs the employer ₹1.2 lakh annually plus ~₹14,400 in additional employer PF, and the employee pays higher income tax on the increment. The same ₹1.2 lakh invested in a comprehensive benefits package — health insurance for the family, mental health access, OPD cover, and term life — delivers significantly higher perceived value because health claims directly protect household savings.
From the employee's perspective, a ₹5 lakh health insurance policy that covers a hospitalisation actually saves them money they would otherwise spend. A salary increment of equivalent size is taxed before they ever see it.
Benefits as a recruitment signal
Job listings that lead with benefits — especially health cover details — consistently outperform those that don't on platforms like LinkedIn and Naukri. Candidates today search specifically for "health insurance" and "wellness benefits" in job descriptions. A listing that specifies "group health insurance up to ₹5 lakh, including family, maternity, and mental health" signals a mature employer who thinks about their team holistically.
For SMEs competing against larger companies for talent, a well-articulated benefits package can be the differentiator that closes an offer. A well-resourced startup with good benefits can attract candidates who would otherwise only consider established MNCs.
The retention multiplier
When benefits are designed thoughtfully and communicated well, they create a compounding retention effect. Employees who have used their health insurance in a moment of need — a family hospitalisation, a mental health crisis, a child's medical emergency — remember which employer made that possible. That experience builds a loyalty that salary alone cannot create.
The key is making benefits accessible and frictionless. A health policy that requires three rounds of paperwork to claim defeats the purpose. Benefits delivered through a well-designed app — where employees can check coverage, book teleconsultations, and track claims on their phone — are used more, valued more, and remembered during renewal season when recruiters come calling.
Where to start
If you're building or upgrading your benefits programme, start with the non-negotiables: a meaningful group health insurance policy covering employees and their immediate families. Then layer in OPD and mental health access. These two elements, done well, cover the vast majority of employee healthcare needs and signal genuine care without requiring a large HR team to administer.
Annual benefits reviews — surveying employees on what they use and what they want — keep the programme relevant and demonstrate that you're listening. Benefits that employees don't know about or can't access are benefits that don't retain anyone.