Average increments to drop to 9.1% in 2023 from 9.4% in 2022: Deloitte survey
The average increment of employees in India is likely to drop to 9.1 per cent in 2023 from 9.4 per cent in 2022, a Deloitte India study says.
The Deloitte India Talent Outlook 2023, which comprises the viewpoints of CHROs at 300 organisations across seven sectors and 25 sub-sectors, says one in every three organisations is planning to give double-digit average increments.
According to findings, increments in 2023 are expected to be lower across almost all sectors, compared to 2022's actual increments.
One of the highlights is that the IT sector is likely to witness a major drop in increments as compared to 2022. Additionally, attrition in India reached 19.7 per cent in 2022, up from 19.4 per cent in 2021. The forecast is, however, bright for the Life Sciences sector, which is expected to witness the highest increments in 2023.
Commenting on the subject, Anandorup Ghose, Partner, Deloitte Touche Tohmatsu India LLP (Deloitte India), said, “The significant attrition levels across industries in late 2021 continued until early 2022. We saw Indian organisations budgeting the highest increment in 2022 over the last four years. What they also did was hire aggressively. This led to employee costs rising faster than revenue growth over the last 3–4 years in almost every other company. Stubborn inflation, higher interest rates, and a slowing economy are likely to make organisations more cautious this year. We expect increments and attrition to witness lower trends in 2023”.
Learning and development trends
The study further points out that amid the uncertainty of the future of work, organisations must deploy a common skills framework to identify gaps in their existing talent capability and fuel a wide range of talent-related decision-making. While almost three in every four organisations recognise the value of a common skills framework primarily for learning and development and career progression, approximately 42 per cent of organisations do not revise their framework regularly to contextualise it to changing business requirements.
The survey identifies a major skill gap. Nearly 19 per cent of organisations —mostly in the IT, ITeS, and Consumer sectors —confirmed that their employees have visibility of skills beyond their current roles, the study says.
This factor stressed the need for upskilling and reskilling employees to plug holes in the segment. Again, 80 per cent of organisations reported that leadership teams have no structured data or reporting mechanisms to understand the current skill capital, findings suggest.
The study recommends improved employer-employee relationships to build the brand. To this effect, 27 per cent of organisations have gone beyond their permanent workforce and invested in skills-based training for gig workers while 13 per cent reported planning to do so. It emphasises the integration of non-traditional workers into the workforce to provide organisations with expanded access to crucial skills to survive in a rapidly changing marketplace.
Diversity and sustainability trends
As female participation rates across white-collar jobs gradually increased to 25.3 per cent in 2022 from 24.1 per cent in 2021, workplaces today are making conscious efforts to include talent from lesser-represented groups such as the LGBTQ+ demographic and neurodiverse talent. This is a relatively new development for the Indian job market. Incorporating expansive diversity, equity, and inclusion policies to foster a safer, more inclusive culture has greatly improved employer brand value—especially amongst Millennial and Gen Z talent.
Sustainability initiatives by firms are finding takers, the study says. Nearly 66 per cent of respondents reportedly have an ESG framework that extends beyond a CSR policy and 21 per cent reported being in the planning phase of designing one. The scope of HR in helping organisations improve their ESG performance has been gradually expanding.