Institutionalising Empathy: Why Corporate NPS is the Next Big Leap for India’s Businesses

Ludhiana’s business owners pride themselves on treating employees like their own family. However, at times employee welfare is handled informally by the business owners out of their pocket, such as paying for medical emergencies or retirement bonuses. As times change and the workforce modernises, this ad-hoc and informal approach to employee welfare is becoming tougher to sustain and scale.

At a panel discussion held in Ludhiana titled the Retire Smart: Financial Wellness Leadership Series, a collaborative initiative by the Pension Fund Regulatory and Development Authority (PFRDA) and Outlook Money, industry leaders spoke about how Corporate National Pension System (NPS) can be positioned as a human resources (HR) best practice in India for business owners.

The conversation highlighted that while mandatory government schemes are firmly in place, actual employee welfare requires a personal touch that needs to be properly structured, as employees increasingly seek formalised benefits beyond a salary.

Mridula Jain, founder and chairperson of Shingora Textiles, said she has always focused on the welfare of her workforce. She added that beyond just technical compliance with government policies, a personal connection with employees is crucial for long term retention.

“For the well-being of society and the well-being of my employees, my sole aim has been to look after them,” Jain said.

She detailed an incident where she bypassed regular formal procedures to secure immediate private medical care for an employee who had suffered snakebite. She instructed her team to not get into the lengthy formalities and have the employee admitted to a private hospital for treatment.

“Human emotion is very important in keeping track of our employees,” Jain said.

Building on this theme, other industry veterans present at the event also noted that workforce loyalty is directly linked to how secure workers feel in their jobs.

Gurmeet Singh Kular, managing director of Kular Sons and president of the Federation of Industrial & Commercial Organisation (FICO), Ludhiana, shared insights from experience of managing legacy staff members. He highlighted that future business growth is impossible if the company’s management views its own workforce negatively as a liability.

‘As long as we consider our employees a liability, we cannot grow,” Kular said.

He said his business employs nearly 70 individuals who were inherited as legacy staff over multiple generations. Kular detailed how he personally arranged private neurological treatment for a caretaker who suffered a severe road accident, highlighting how local business owners presently invest in their staff. However, the panellists noted that there’s a need to formalise employee welfare to better serve the needs of employees and make them feel secure in their roles.

On the regulatory end, PFRDA is also coming up with new programmes and schemes to help transform informal employee welfare initiatives into structured retirement and health benefits.

Sumit Kumar, chief general manager, PFRDA, highlighted the low awareness regarding pension plans among local businesses and shared PFRDA’s upcoming initiatives to make pension schemes more attractive. He noted that financial well-being is a core component of overall productivity, which is why regulators are creating new financial products tailored to corporate needs.

“We have issued guidelines for a new product which will cover health as well,” Kumar said.

He elaborated that PFRDA’s upcoming scheme, called NPS Swasthya, aims to bundle retirement investments with a group health insurance cover of up to Rs 30 lakh. The initiative addresses the hesitation workers might have about locking away their current income for a distant retirement.

The panellists agreed that moving from an informal charity model to a structured financial system is crucial for employee retention and the overall growth of India’s local industries. They concluded that voluntarily adopting Corporate NPS and integrating it with broader health benefits can help companies in formalising and rejuvenating their traditions of empathy and help them retain their human capital.