While most of the world completes the transition to an aged society, India would remain vibrant for a few decades, since the ageing process in the country started only in the late-1980s.
Hyderabad, Aug. 31
The increased life expectancy in the subcontinent combined with improving healthcare and living standards is going to pose a serious problem for the Indian employers, according to a survey finding by Watson Wyatt, a global consulting firm focusing on human capital and financial management.
Going forward, the major HR challenge for the Indian companies would be not in recruiting but in ensuring they retain the talent in a growth market, the survey points out.
Of course, while most of the world completes the transition to an aged society, India would remain vibrant for a few decades, since the ageing process in the country started only in the late-1980s.
The survey report has found that healthcare and retirement costs of ageing workforce would have a major financial impact on companies' bottomlines over the next two decades since the ability of Government to pick up more social welfare cost is very limited.
Releasing the pan-Asia survey report titled `Ageing Workforce 2006' here, the Managing Consultant of Watson Wyatt Worldwide, Mr Richard Holloway, said, "The rich findings of the survey indicate that some governments and many employers will face major cost upheavals, as more than 70 per cent of employees now expect their employers to fully fund their healthcare and retirement costs."
Further, citing the survey findings, he said the employers were currently ill-equipped to deal with ageing workforces. Like many developing countries, India still lacks a comprehensive social system to protect retirees from financial insecurity. Currently, almost 90 per cent of India's workforce does not participate in any formal retirement benefits scheme.
Watson Wyatt Worldwide has conducted survey focussing specifically on the employers' view of the outlook for healthcare and retirement benefits. Over 200 major companies in 11 countries across the pan-Asia region were interviewed for the survey.
The survey report on India has pointed out that the fundamental change in the country's demographics would have far-reaching consequences for the economy and companies operating in the country.
"As the Indian workforce ages, employers will increasingly find a need to hire older workers and to keep them in the workforce longer, as long as they remain productive. As a result, healthcare and retirement needs are anticipated to increase."
But the ageing of India's workforce may also present an opportunity for employers, Watson Wyatt says. Its research strongly suggests that "a well designed retirement and healthcare scheme will greatly enhance the ability of companies in India to attract and retain the most qualified and competent employees."
According to Mr Holloway, companies can no longer afford to view retirement and healthcare benefits provision as optional. "As competition for global talent intensifies amongst companies, well-designed healthcare and retirement schemes that take into account demographic changes will be more effective in ensuring long-term corporate profitability."