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As India's business landscape evolves rapidly, Long-Term Incentive Plans LTIPs are expanding their scope and adoption. They're becoming more diverse, adaptable, and strategic in nature as companies seek to align employee rewards with broader company goals.
A recent EY study highlights several emerging trs in LTIPs based on survey responses from the fiscal year FY22-23:
Expansion of Equity-Based Plans: Traditionally exclusive to senior management, LTIPs are now being exted to a wider range of employees through equity-based schemes. This move reflects companies' growing realization that these plans can serve as powerful tools for wealth creation across all levels.
Use in Cash Allowances and Benefits: In response to market changes sparked by the pandemic, LTIPs are increasingly being utilized not just for cash compensation but also as a means of providing benefits like healthcare subsidies or flexible working arrangements.
Industry-Specific Customization: As sectors such as electric mobility, logistics automation, fintech, and generativedrive economic growth, they're shaping strategies around LTIPs. Companies in these fields are leveraging LTIPs to foster both company-wide achievements and individual contributions.
Incorporation of Emerging Technologies: Advanced technologies demand specialized skills, leading companies to redefine their talent needs through LTIPs that cater to the evolving skill landscape. This approach ensures that LTIPs become not just rewards for performance but also tools for attracting talent with cutting-edge capabilities.
The EY report underscores how LTIPs have evolved from traditional compensationinto strategic tools capable of driving company performance and retning top talent in a rapidly changing business environment. By focusing on performance recognition, wealth creation, and supplementing cash salaries, companies are effectively using LTIPs to adapt to market dynamics and future-proof their workforce.
Download the full report for more detled insights into how these trs have reshaped the landscape of LTIPs in India.
The ability to leverage LTIPs effectively is a game-changer for organizations ming for sustned success. As businesses navigate complex challenges, embracing LTIP strategies that align talent acquisition and retention can be a pivotal factor.
How EY Can Help
EY Spotmentor Digital Learning Solutions: Empowers organizations to enhance future workforce skills by identifying and closing skill gaps through insights.
EY TalentMiner - based Digital Hiring Solution: Streamlines the hiring process, reducing time-to-hire, improving candidate experiences, and enhancing the quality of hires.
Employee Stock Incentive Plans ESOP Consulting Services: Offers comprehensive advice on designing, implementing, and administering ESOPs to align employee interests with company growth.
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Indian Business Landscape Evolution Long Term Incentive Plans Expansion Equity Based Schemes Wider Adoption Cash Allowances and Benefits Integration Industry Specific LTIP Customization Emerging Technologies in Talent Needs