Real estate companies are waking up to deal with the slowdown. Hit by falling fund-raising avenues and demand from customers, property firms are in the process of increasing variable pay packages for a large chunk of their employees.
“We have taken a decision to increase the variables,” said Ram Yadav, chief financial officer, Orbit Corporation. “This would help us not to take an upfront hit, in case the slow down continues. We have the right (staff) strength and don’t have plans to downsize,” he added.
“Since the market conditions are changing, many developers may try to increase the variable portions of the salaries to cut down fixed costs,” said Shobhit Agarwal, Joint MD (Capital Markets), Jones Lang LaSalle Meghraj, a global real estate consultancy.
No Indian firm has trimmed work force as yet in the fear of bad publicity. However, salaries in the sector are not very attractive now. Earlier, people with three years of experience used to get 50 per cent rise in salaries while joining a new place, but now they have to satisfy with a 20 per cent increase, according to senior officials in placement firms.
The country’s largest realty company DLF on Monday denied media reports that it had cut 300 people from its projects outside Delhi. “The report is baseless and we don’t have any plans to downsize,” said a company spokesman.
Mumbai-based realty firm Akruti City said it is well settled with all projects and team members. “There is no changes in plan. All our projects are in prime locations in Mumbai, Thane, Pune, Surat, Baroda and Ahemedabad where demand is high,” said Hemant Shah, chairman, Akruti City.
Some analysts believe that it is too early to predict the doom.