The second phase of Deloitte’s Workforce and Increment Trends survey 2021 provides India-specific insights on rewards, impact of COVID-19 on benefits policies, and return to work strategies of organisations. According to the survey findings, 92 percent companies gave an increment in 2021 at an average of 8.0 percent compared with only 4.4 percent in 2020 where just 60 percent companies had extended a pay hike.
Early estimates reveal that average increment for 2022 is expected to increase to 8.6 percent in line with a healing economy and improving confidence. If this holds true, increments in 2022 would reach the pre-pandemic levels of 2019. About 25 percent of companies surveyed have projected a double-digit increment for 2022.
Anandorup Ghose, partner, Deloitte Touche Tohmatsu India LLP, said, “While most companies are projecting a higher increment in 2022 compared to 2021, we continue to operate in an environment where COVID-19 related uncertainty persists, making it harder for companies to forecast. Some of the survey respondents have also just closed their 2021 increment cycle so 2022 increments are a fair distance away for them. GDP forecasts for FY 2021-22 were revised down after the second wave and we expect organisations to closely watch similar developments while managing their fixed cost increases next year.”
Here are some key highlights from the survey-
- 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 / 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 organisations continue to differentiate pay increases by skills and performance. Top performers can expect about 1.8 times the increments given to average performers.
- Approximately 12 percent employees were promoted in 2021 as compared to 10 percent in 2020. Almost 12 percent of companies have updated their bonus or variable pay plans to align their rewards structures with the changing priorities.
- With respect to hiring, 78 percent of companies stated that they have started recruiting at the same pace as they used to prior to COVID-19.
- About 60 percent organisations updated their health insurance policy due to COVID-19 and 24 percent organisations readjusted their life insurance policy. Most organisations that updated their insurance policies, either introduced a COVID-specific claim or increased the coverage amount for their employees.
- Almost 2 out of every 3 organisations readjusted their leave policy and introduced special leaves of 14 to 21 days, over and above the regular annual paid leaves. Almost half the respondents provided some sort of monetary compensation to the family of the employees who lost their lives due to COVID-19.
- As far as return to office is concerned, only 25 percent of companies have conducted an employee preference survey to decide their return to work strategy.
- The IT sector has been the most proactive in assessing employee preferences with regards to the desired workplace.
- However, at an all India level, only 40 percent organisations have finalised their return to work strategy.
The 2021 Workforce and Increment Trends survey was launched in July 2021 as a B2B India specific survey. The primary audience for this survey were seasoned HR professionals. More than 450 organisations participated in this edition spread across seven sectors and 24 sub sectors.
It is heartening to note that most companies are extending increments in 2021 even in sectors which have not fully recovered yet. Also reassuring is the fact that while most organisations have not finalised their return to work strategy, almost 90 percent organisations said that they are likely to finalise a hybrid model in future.