Article: 2024 job market dynamics: Strategies for growth in India

Talent Management

2024 job market dynamics: Strategies for growth in India

A people-centric approach to workforce planning, varied salary trends, and strategic adaptations in recruitment and employee engagement are crucial for the 2024 Indian job market amidst economic uncertainties.
2024 job market dynamics: Strategies for growth in India

In a world fraught with economic uncertainties, FY 2024 emerges as a battleground where challenges and resilience intersect, shaping the destiny of the Indian workforce. Amidst global recession fears, India's robust economic position shines as a beacon of hope, with a GDP growth of 7.7% early in the fiscal year. However, behind this facade of strength lies a tapestry of questions for the workforce: What hurdles lie ahead?

What hurdles lie ahead?

In the echoes of past years, the Indian workforce has navigated through waves of change, witnessing the ebb and flow of attrition rates influenced by global conditions and corporate strategies. Recent times have seen a shift towards a more cautious workforce planning approach, characterised by slower hiring and moderate salary increments. This shift includes strategic adjustments in recruitment practices favouring leaner teams, resulting in fewer job openings and increased concerns about layoffs.

The technology sector, employing 5 million people, is likely to see reduced attrition rates in FY24's second quarter due to scaled-back hiring and limited job availability. Nevertheless, it grapples with a considerable gap in essential skills like AI, Big Data Analytics, and cloud computing, surpassing 50%, prompting companies to offer competitive remuneration and benefits to attract and retain top talent.

Salary trends

According to the EY Future of Pay 2024 report, salary increments across various sectors will vary significantly in 2024. For instance, e-commerce, which experienced a peak surge of 14.2% in 2022, is anticipated to decline to 10.9% in 2024, reflecting shifts in consumer behaviour and intensified competition. Conversely, professional services might witness a slight rise from 9.7% in 2023 to 10%, indicating a strategic rebound. Meanwhile, the financial sector and media and entertainment could observe modest declines, reflecting intricate market dynamics. On average, salary increments are projected to be around 9.7% across industries. Additionally, at the executive level, although top executives typically receive significant performance-based variable pay, their projected salary increases for 2024 are anticipated to be lower than those of 2023.

Start-up ecosystem

The dynamic start-up ecosystem is grappling with funding constraints, leading to modest salary hikes, with most offering less than a 20% increase. Both established and new companies have had to adopt innovative strategies like 'dry promotions', which not only reflect financial limitations and the global market condition but also highlight the emotional strain of navigating uncertain waters while striving for growth and recognition.

Incentive plans

Additionally, companies are re-evaluating their long-term incentive plans to better align with strategic objectives, extending them beyond senior management to include more employees. This strategic shift underscores a move towards broader employee incentives, recognising the significance of engagement and retention across all organisational levels, alongside a shift towards more flexible and appealing incentive structures.

Employee engagement and Wellbeing

Navigating the current landscape of salary appraisals and incentives involves addressing both challenges and opportunities. Companies are re-evaluating their talent strategies, focusing on upskilling and reskilling initiatives to meet evolving market demands. Emphasising employee engagement, well-being, and personalised incentives can drive performance and retain critical talent. Alongside salary appraisals, companies may also benefit from focusing on financial wellbeing support, offering access to financial planning services and tailored benefits packages and career development plans to create a personalised employee experience.

Supporting the shift towards remote and hybrid work by providing the necessary infrastructure to accommodate diverse preferences is crucial. Additionally, recognition and rewards, such as recognition platforms and peer-to-peer recognition programmes, can play a vital role in acknowledging and motivating employees effectively.

In this ever-evolving landscape, a people-centric approach to salary appraisals, combined with holistic support and engagement strategies, is pivotal in sustaining growth and nurturing a motivated workforce.

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Topics: Talent Management, Benefits & Rewards, Leadership, #Future of Work

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