MUMBAI: Average increments are expected to increase to 7.3% in 2021, up from 4.4% in the previous year, according to a report by Deloitte Touche Tohmatsu India.
According to the survey results, 20% companies plan to give a double-digit increment in 2021 compared with only 12% in 2020. The survey also finds that of 60% companies that gave an increment in 2020, a third of them did that through off-cycle increments.
Anandorup Ghose, partner at Deloitte Touch Tohmatsu, said, “Covid-19 has made year-on-year analysis tricky as 2020 has been an anomaly, making 2019 a better year for comparison. Average India 2021 increment of 7.3% is still considerably lower than 8.6 % in 2019. While business activity is rebounding quickly, organisations are managing compensation budgets responsibly considering their affordability and sustainability of fixed cost increases.”
“HR and leadership teams in India Inc. have shown tremendous maturity in decision-making to responsibly deal with the impact of Covid-19. Post March 2020, most companies decided either not to offer increments or defer them until they get more clarity. About 25% companies even extended a pay cut to senior management. Organisations largely preferred saving jobs of most to offering higher increments and bonuses to a few. Given that the risks related to the pandemic are not over yet, it is no surprise that they are treading with caution,” said Ghose.