Almost all 450 organisations that participated in Deloitte Touche Tohmatsu survey are planning to give hikes.
Sudipto Dey |
Last Updated at March 2, 2022 11:45 IST
As business sentiment improves and companies take measures to counter employee attrition, corporate India is likely to loosen its purse string in 2022 to retain and attract talent.
As a result, average salary increments in 2022 are expected to cross the pre-Covid levels, finds an India-specific survey of workforce and increment trends.
Average increment in 2022 is expected to go up to 9.1 percent–this is 50 basis point higher than the pre-Covid year average increment in 2019 (8.6 per cent), the study said, based on a survey among HR professionals from 450 organisations.
Average increments dropped to 4.4 per cent in 2020 following a Covid-induced country-wide lockdown of businesses. That subsequently recovered to touch the 8 per cent mark in 2021, the study noted. The survey found that pan-India attrition rates in 2021 have crossed the pre-Covid levels of 2019.
Almost all the organisations that participated in the survey–around 450–are planning to give increments in 2022, compared with 92 percent in 2021, while this figure was only 60 percent in 2020, said the latest edition of 2022 Workforce and Increment Trends survey by Deloitte Touche Tohmatsu India. Conducted in December 2021, the respondents were largely HR professionals, spread across seven sectors and 27 sub-sectors.
In 2022, around a third of the organisations (34 per cent) plan to give double-digit average increments, compared with only 20 percent in 2021, and 12 percent in 2020. Employees at junior management are, on an average, expected to receive a double-digit increment in 2022, the survey added.
The findings suggest that Life sciences and IT sectors are likely to give the highest increments in 2022. FinTech, IT-product companies, and digital/e-commerce organisations are expected to give double digit increments in 2022, the study said.
The survey found that top performers are likely to get 1.7 times the increment given to average performers.
To tackle rising attrition rates – popularly touted as the ‘great resignation wave’ – more than 90 percent organisations plan to pay bonuses in 2022. “Four out of every 10 organisations are planning to pay more than 100 percent of the target bonuses,” the study said.
Apart from financial incentives and rewards, organisations are also looking to enhance employee retention through job enrichment, career management, and employee upskilling.
Even though increments are expected to be better in 2022, compared to the last two years, on the whole corporate India is likely to be more prudent while doling out salary hikes. “Where increments go from here on will be a function of economic viability and fundamental business growth over the medium to long term,” said Anubhav Gupta, partner, Deloitte Touche Tohmatsu India.
The ‘great resignation wave’ is likely to continue in the first half of the new financial year, he said.
Rising attrition rates and talent retention are key concern areas for corporate India’s HR professionals over the last couple of years. At a pan-India level, organisations have reported an average attrition at 19.7 per cent in 2021, compared to 15.8 per cent in 2020, and 18.9 per cent in 2019, the survey said. Interestingly, 88 per cent of the overall attrition is voluntary in 2021, as compared to 77 per cent in 2020.
Gen-Z are on the move
In organisations with Gen-Z population (born after 1994) constituting more than 50 per cent of the overall employees, the study found that the average attrition is as high as 28 per cent, compared to 20.1 per cent in companies with a relatively older employee base.
While all sectors are reporting a double-digit attrition in 2021, IT, Services and Financial Services have witnessed the highest attrition in 2021, the study added.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.