Annual salary increments expected to touch 8.6% in 2022: Deloitte survey

The India-specific B2B survey was conducted in July 2021 with participation of HR professionals from 450 organisations spread across more than two dozen sectors and sub-sectors
More than two-thirds of India Inc recruiters believe they have returned to the pre-pandemic level of hiring. In the latest edition of the Workforce and Increments Trends Survey by Deloitte, almost 78 per cent of companies said they had started recruiting at the same pace that they had experienced before Covid struck. 

In line with improvement in business sentiments, the survey reveals that the average annual salary increments are expected to touch pre-pandemic levels of 8.6 per cent in 2022, up from 8 per cent estimated for 2021. About 25 per cent of companies surveyed have projected a double-digit increment in 2022, the report noted. And, top performers can expect 1.8 times the increments given to average performers, the survey found.

The hiring trends reveal wide variations across sectors. Around 96 per cent of tech companies said they were hiring at least as much as pre-Covid levels (2019). But, the corresponding number for services is only 48 per cent as per the survey results. For consumer products and manufacturing sector, the figures are 73 per cent and 77 per cent, respectively. Financial services and Information Technology enabled Services (ITeS) sectors are at around 89 per cent. At 94 per cent, only the life sciences sector matched the hiring optimism of the IT sector.

The India-specific B2B survey was conducted in July 2021 with participation of HR professionals from 450 organisations spread across more than two dozen sectors and sub-sectors.

At an all-India level, the top three reasons for attrition are: compensation & benefits; nature of role and career path; and limited internal growth opportunities. Only 3 per cent of organisations cited work-life balance as a reason for attrition, despite it having worsened in a work from home set up in most industries.

On the question of whether organisations are looking at introducing more fixed term contracts/freelance workers into the system, only 17 per cent of the companies surveyed responded in the affirmative. Consumer products and financial companies are the most likely to explore this model of employment, the survey said.  

Post-pandemic salary increments

While the average annual salary increments are expected to touch 8.6 per cent in 2022, recruiters indicated that the IT sector could offer the highest raise, followed by the life sciences sector. IT is the only sector that is likely to offer double-digit increments, with digital/e-commerce companies topping the list. However, increments are likely to be muted in retail, hospitality, restaurants, infrastructure and real estate sectors.

Following the pandemic-induced lockdowns and travel restrictions in 2020, average salary increments had dropped to a low single digit level of 4.4 per cent. As business sentiments improved in recent months, the average India increments in 2021 are pegged around the 8 per cent mark, the survey noted.

Going forward, function-specific increment differentiation may become more prevalent as attrition rates vary significantly across different skills, noted Anubhav Gupta, partner, Deloitte Touche Tohumatsu India.

Approximately, 12 per cent employees were promoted in 2021, as compared to 10 per cent in 2020.

Almost 12 per cent of the companies have updated their bonus and variable pay plan to align their rewards structure with changing priorities. Around 60 per cent of the organisations surveyed updated their health insurance policy due to Covid-19. Almost two out of every three organisations readjusted their leave policy and introduced special leave ranging from 14 to 21 days. Around half the respondents provided some sort of monetary compensation to families of employees who lost their lives due to Covid-19.

India Inc yet to figure out return-to-office strategy

On return to office strategy, organisations are still working out the details. Only 25 per cent of the organisations have conducted surveys to figure out employee preference. On an all-India level only 40 per cent of the organisations have fleshed out their return-to-work strategy, the survey found. The IT sector has been most proactive in assessing employee preference. On the whole, in most places, employees prefer a hybrid work arrangement.

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