Companies to give 8.6% pay hike next year: Deloitte
Indian companies may give an average pay hike of 8.6% in 2022, after paying an 8% increment in 2021, a survey by consulting firm Deloitte showed.
The survey estimated that top performers would get 1.8 times the average pay hike and over three-fourth (78%) of employers are hiring like in pre-covid days, despite some uncertainty around a third wave of the pandemic.
“Early estimates reveal that the average increment for 2022 is expected to increase to 8.6%, in line with a healing economy and improving confidence. If this holds true, increments in 2022 will reach the pre-pandemic levels of 2019. About 25% of companies surveyed have projected a double-digit increment for 2022,” Deloitte’s Workforce and Increments Trends Survey said.
Anandorup Ghose, partner, Deloitte Touche Tohmatsu India LLP, said that while most companies are projecting a higher increment in 2022 than 2021, India Inc. continues to operate in an environment where covid-19 related uncertainty persists, making it harder for companies to make precise forecasts.
The survey indicates that in 2022, the information technology (IT) sector is likely to offer the highest increments, followed by the life sciences sector. IT is the only sector that is expected to extend double-digit increments, with some digital and e-commerce companies planning to give some of the highest increments.
“Retail, hospitality, restaurants, infrastructure, and real estate companies continue to project some of the lowest increments in line with their business dynamics. Not all employees are expected to get the same increment, as organizations continue to differentiate pay increases by skills and performance,” said the survey that collected data from 450 companies.
“Organizations are trying to balance employee cost with what is best for their employees. It is heartening to see most companies extending increments in 2021, even in sectors that have not fully recovered yet. Going forward, function-specific increment differentiation may become more prevalent as attrition rates vary significantly across different skills,” said Anubhav Gupta, partner, Deloitte.
Gupta said 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 ship.
“With respect to hiring, 78% of companies stated that they have started recruiting at the same pace as they used to prior to covid-19. Other key findings from the survey show that about 60% of organizations updated their health insurance policy due to covid-19 and 24% organizations readjusted their life insurance policy,” the survey said.