This article has been contributed by Dr. Brillian S. K., Chief People Officer, TimesPro
The debate sounds familiar, but the context has changed. A decade ago, candidates asked, “Is Provident Fund a part of the salary?” In 2025, they ask, “How much will I receive in hand?” The compensation conversation has shifted from deferred promises to immediate utility. In this landscape, pay anchors retention, especially in India, yet it cannot sustain it alone.
Global salary budgets remain steady in the mid-three percent range across mature markets (roughly 3.2%–3.6%, with the U.S. near 3.5%), signalling targeted, not expansive, pay moves. India is an outlier: despite moderation, planned increases for 2025 were around 9.2%, among the world’s highest, making market-aligned, take-home pay table stakes rather than a differentiator.
This leads to a very fundamental question, ‘Why don’t perks outweigh salary?’ Lifestyles and financial behaviours have evolved over the last few years. Younger professionals prefer to spend NOW rather than harvest benefits later. India’s net household financial savings fell to a five-decade low in FY23, then only modestly rebounded in FY24 even as liabilities rose, evidence of a ‘consumption-today’ bias that elevates the value of cash in hand over opaque or deferred benefits.
Cultural signals amplify this shift. A booming creator economy normalises individual choice and instant gratification and it quietly devalues corporate freebies that once felt special. India’s influencer marketing industry stood at roughly INR 3,600 crores in 2024 and is projected to grow a further 25% in 2025, a momentum that shapes tastes, spending and the perceived worth of workplace perks.
What Gen X once treated as status, the fixed ‘executive’ trappings, no longer inspires. The airport-lounge metaphor captures it: what used to be a differentiator has become rote. Many professionals would now rather pay for a quiet corner than queue for access that once signalled privilege. Unless perks cross into a truly aspirational tier, think ‘black/platinum card’ scarcity, they rarely move the retention needle. Employees know better ways to spend on their terms and an enriched in-hand salary gives them that agency. This also is an indicator of behaviour, professionals want to control and manage their spends than let companies decide on “perks”.
Are perks overrated, then? The gimmicky ones are. The benefits that matter remove life friction, protect wellbeing and enable growth: healthcare, paid leave, flexibility and development. Employer practice reflects this – healthcare coverage remains near-universal in major markets, while companies continue to emphasise flexible work and well-being supports.
Crucially, the pay-versus-perks argument misses a third force: purpose and value alignment. Randstad’s 2025 Workmonitor finds work-life balance surpassing pay as the top motivator for the first time in 22 years and a significant share of workers have already quit roles over misaligned values. Deloitte’s 2025 Gen Z and Millennial Survey focusses on the same pattern: people want fair pay, but they stay when they also see learning, mentorship and purpose. In short, compensation captures attention; alignment and balance sustain it.
These realities also explain why many traditional perks feel like a ‘pseudo’ joy in 2025. Standardised freebies cannot compete with individualised choice, especially when life stages differ so sharply. Generations today often prefer consuming experiences now rather than banking distant benefits; the perceived utility of cafeteria vouchers or club tie-ups pales next to fungible cash, schedule control or meaningful development.
Parnas Ghosh
What Could employers do?
- Pay with precision, not parity: In India’s context, fair take-home pay is the entry ticket. Use external data to calibrate hot-skills premiums and prevent ‘loyalty penalties’ that underpay stayers relative to joiners. In flatter global budgets, target increases where roles create disproportionate value and be transparent about the rationale.
- Redesign perks: Retire tired giveaways. Offer a modular portfolio employees can assemble like health top-ups, mental-health coverage, caregiving credits, travel wallets and financial-wellness coaching. Evidence suggests many employers still under-index on flexibility/choice in benefits design, closing that gap increases perceived value far more than adding another generic perk.
- Make purpose practical: Tie team priorities to customer outcomes and community impact. Equip managers to coach, not just coordinate; make internal mobility and learning visible and accessible. Younger cohorts consistently rank learning, mentorship and values alignment among the reasons they choose and remain with employers.
- Treat flexibility as policy, not a perk: Flexible and hybrid models continue to carry enduring appeal across high-skill segments; anchoring them in operating design protects retention without sacrificing performance.
These moves recognise a broader truth about how aspirations have shifted. From “Is Provident Fund part of the salary?” to “What’s my take-home?”, employees increasingly optimise for immediacy and autonomy. They prefer to direct their own spending rather than accept one-size-fits-all benefits; they would rather buy the quiet corner than flash the lounge card; and unless a perk is genuinely scarce and aspirational, it rarely compensates for a thin salary or a culture that ignores balance and meaning.
The retention formula for 2025 is therefore simple and demanding. Companies must pay fairly, embed flexibility and connect work to something worthwhile. Done together, these choices respect how lifestyles have evolved, how influencers and social signals shape perceived status and why cash still matters most at the margin. Companies that act on this clarity will spend less chasing fads and keep more of the talent they cannot afford to lose.
Pratyusha Srivastava