Annual Salary Increments Expected To Touch 8.6% In 2022: Deloitte Survey

Average annual salary increments are expected to touch pre-pandemic levels of 8.6 per cent in 2022, early estimates from Workforce and Increments Trends Survey by Deloitte reveal. In line with gradual improvement in business confidence in recent months, about 25 per cent of the companies surveyed have projected a double-digit increment in 2022, the report said.

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

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.

The survey indicates that in 2022 the information technology sector is likely to offer the highest increments, followed by the life sciences sector. IT is the only sector 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 in 2022.

Across organisations pay increases will be uneven with companies linking skill upgradation with performance. Top performers can expect 1.8 times the increments given to average performers, the survey found.

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% in 2020. With respect to hiring, 78% companies stated that they have started to recruit at the same pace they used to prior to the Covid-19 pandemic.

Almost 12 per cent of the companies have updated their bonus and variable pay plans 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 leaves ranging from 14 to 21 days. Around half of the respondents provided some sort of monetary compensation to families of employees who lost their lives due to Covid-19.

On return to office strategy, organisations are still working out the details. Only 25 per cent of organisations have conducted employee 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 in regards to desired workplace. The survey said that in most places employees prefer a hybrid work arrangement. Some leading organisations are taking specific initiatives to prepare managers to lead teams in a virtual/hybrid workplace model and drive collaboration through training programmes, the survey said.

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