News: 50% organizations are keeping salary increment budgets unchanged: Report

Compensation & Benefits

50% organizations are keeping salary increment budgets unchanged: Report

As per KPMG India’s COVID-19 HR Practices Survey ‘Cutting through crisis, around 36 percent organizations have opted for decreasing the salary increment budgets.
50% organizations are keeping salary increment budgets unchanged: Report

As per the KPMG India’s COVID-19 HR Practices Survey ‘Cutting through crisis’, which aims to capture and understand the impact of the COVID-19 pandemic on the key HR processes, policies and interventions across industries, 50 percent organizations across industries are keeping their salary increment budgets unchanged, around 36 percent organizations have opted for decreasing the salary increment budgets. 

This survey was administered and garnered responses from 315 organizations across 20 industry sectors. The survey highlights the impact of the COVID-19 pandemic on a wide gamut of HR practices and processes like – employee well-being, engagement, recruitment, compensation and benefits, performance management, learning, and development, etc.

Here are some of the key findings-

Organization support and well-being

• While 68 percent responding organizations admitted that they are mature to support remote working, only 48 percent of the organizations are supporting their employees by providing laptops with secured connections to ensure smooth remote working.

• 72 percent respondents confirmed the adherence of basic precautionary health measures like usage of sanitizers by their firms, select organizations have gone a mile ahead to ensure the safety of their on-site employees by adopting practices such as daily fumigation of transport buses, plant workspace, boosting immunity through health supplements and food etc.

Employee engagement and communication

• 75 percent of organizations have re-defined their communication strategy to increase engagement of employees, virtual team meetings and briefing for employees by the leadership being the top two leading engagement practices.

• Additionally, few companies have enabled AI-enabled pulse surveys to capture well- being of employees more frequently.

Learning and development

The current crisis is pushing the majority of corporates to take the leap and switch to e-webinars (27 percent) and ‘e-learning’ (26 percent).

Long term perspective

  • If COVID-19 situation persists, around 22 percent of the organization will defer, freeze or suspend incentive payouts to support their overall finances.
  • Few organizations are also exploring to offer Voluntary Retirement Service (VRS) to employees.

Compensation and benefits

  • While 50 percent of organizations across industries are keeping their salary increment budgets unchanged, around 36 per cent organizations have opted for decreasing the salary increment budgets.
  • Incentives such as Short Term Incentive (STI), Long Term Incentive (LTI) and sales incentives are being kept unchanged across levels by majority of industries; however 28 percent of the responding organizations admitted to having reduced STIs at the senior and top management levels.
  • With the health of employees being the focus for all organizations, there was a positive trend observed in some sectors such as advisory, consumer goods, etc. have reported an upward revision of the insurance benefits.

Promotions

50 percent of the companies have deferred or suspended their promotion schedule; at the same time, a downward trend on promotions numbers across all job levels was observed wherein 33 percent of organizations admitted to having reduced it.

Recruitment

  • 66 percent of organizations have deferred or suspended their hiring schedule at different job levels, while 30 per cent have also reduced their headcount budgets.
  • Contract/part-time/gig workforce are the most impacted by this downward trend in recruitment.

The findings clearly highlight what has been the trend for the last two months- while hiring and promotions are seeing a downward trend as organizations struggle to cut costs, learning and engagement of employees has seen a major uptick as they redefine strategies to make employees working from home more productive.

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Topics: Compensation & Benefits, #COVID-19

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