The average variable pay across sectors is projected at 17.4 per cent in FY16, compared to 17 per cent in FY15. According to the survey, in FY15, the highest attrition was seen in the information and technology enabled services sector at 21.9 per cent, whereas the lowest attrition was seen in the energy and natural resources sector at 10.5 per cent.
The reasons for attrition include better pay, and career opportunities, and the need for work-life balance. Companies are using long-term incentive plans, strong performance-based variable pay and monetary / non-monetary recognition awards as levers for retention. The highest projected average increment is in the pharma sector at 12.1 per cent; the lowest in the retail sector at 9.4 per cent.
In the variable pay segment, banking, financial services and insurance (BFSI) segment is projected have the highest projected average variable pay at 19.4 per cent, and the lowest projection is observed in the logistics sector at 15.6 per cent. The consumer business sector shows conservative projections towards increments along with an increased focus towards variable pay.
Increments at the junior management level will be at highest 11 per cent, the average increment projections at top, senior and middle management level are lower than the projected industry average at 10.7 per cent.
This February, global management consultancy Hay Group had projected that compensation of CEOs and managing directors in India is expected to grow 10.2 per cent in FY15, slightly higher than 10 per cent in FY14. Top executives who are part of the senior management team are set to see a 10.5 per cent increase in their pay, up from 10.4 per cent last year.