In spite of the devastating second wave of the pandemic in India, the average increment given out by companies remained unaffected this year, with the average being 8 per cent. This is 3.6 per cent more than last year, with 92 per cent organisations offering pay hikes, compared to 60 per cent in 2020, says a new report.
Considering the recovery being made by different sectors, working professionals can expect their annual increment rising to 8.6 per cent in 2022. A quarter of the organisations are also expecting offer double-digit increments if the economy improves further, adds the findings of the 2021 Workforce and Increment Trends Survey by Deloitte Touche Tohmatsu India LLP (DTTILLP).
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Not surprisingly, like in its phase 1 survey in February this year, the life sciences sector disbursed the highest hike at 9.3 per cent, followed by Information Technology (IT) and ITeS at 9.1 per cent and 8.5 per cent increments respectively. The 2022 projections indicate that the Information Technology (IT) sector, especially sub-sectors like digital, e-commerce and products, is to be at the forefront offering double-digit pay hikes at 10 per cent. Meanwhile, retail, hospitality, restaurants, infrastructure, and real estate companies, which were severely impacted due to the pandemic, will continue to offer low increments.
The study was based on responses from over 450 organisations across seven sectors and 24 sub-sectors. While the increments are expected to reach the pre-pandemic levels, in general, the hikes in 2019 can’t be termed as a great year either, Deloitte believes.
A small portion of organisations (about 12%) have revised their bonus and variable pay plans with the changes in business growth. About 12% employees were promoted this year, a mere two per cent increase compared to last year. Meanwhile, top performers are expected to get 1.8 times increments compared to average performers.
“Organisations are trying to balance employee cost with what is best for their employees in what have been a difficult couple of years for many. Going forward, function specific increment differentiation may become more prevalent as attrition rates vary significantly across different skills,” said Anandorup Ghose, partner, Deloitte Touche Tohmatsu India LLP.
Compensation is usually one of the top reasons for attrition, particularly at a junior management level, where virtual hiring has made it easier to jump ships, he explained.
Reluctance towards WFH continues
While many organisations extolled the virtues of remote working and maintaining productivity levels as they were before the pandemic forced remote work, only one per cent of organisations are keen on continuing with the work from home arrangement. Majority of the companies, almost 90%, favour a hybrid model of working. However, most are not enthusiastic about giving employees the choice on when to work, and how much work they can take on, remotely. Instead, setting limits on the number of work from home days or prior approval from line managers were a few options companies wanted to consider.
“Previously, the organisations used to decide who can work from home; they are now deciding who can/should work from office,” Ghose said. While the hybrid model seems to be the preferred choice, he believed there were critical questions around employees’ health and safety, flexibility and choice, governance, data security, business continuity, collaboration, team work, and culture that needed to be thought through before finalising a robust return to work strategy.
Interestingly, only 40% of the companies have finalized their return to work strategy, while 25% companies, mostly in the IT sector, have done employee preference survey to decide on ‘return to work’ plan.
Modification and upgrading employee health policies saw a surge in 60 per cent of the companies. About a quarter of the organisations also readjusted life insurance policies by introduction covid-specific claim or increasing coverage amount. Apart from this, two out of every three organisations rolled out additional leaves of 14 to 21 days. Nearly half the organisations provided monetary compensation to family of the employees who succumbed to the coronavirus.