India Inc likely to give 7.3 per cent average increment this year: Survey

NEW DELHI:  About 92 per cent of the companies plan to give an increment in FY22 compared with only 60 per cent in FY21 and the average increment for companies in India is expected to go up to 7.3 per cent in the upcoming fiscal from 4.4 per cent this fiscal, according to a Workforce and Increment Trends Survey by Deloitte.

However, the 7.3 per cent projected increment  is lower than the 8.6 per cent average increment in FY20. Also, 20 per cent of the surveyed companies plan to give a double-digit increment in FY22 compared with only 12 per cent this financial year.

“Covid-19 has made year-on-year analysis tricky as 2020 (FY21) has been an anomaly, making 2019 (FY20) a better year for comparison… While business activity is rebounding quickly, organisations are managing compensation budgets responsibly considering their affordability and sustainability of fixed cost increases,” said Anandorup Ghose, partner at DTTILLP.

He added, “Post March 2020, most companies decided either not to offer increments or defer them until they get more clarity. About 25 per cent 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.” About 400 organisations participated in the survey spread across seven sectors and 25 sub-sectors. The study finds that every sector is expected to give a higher increment.

While Information Technology (IT) and Life sciences are expected to give the highest increments, the manufacturing and services sectors may offer relatively lower salary increases. 

Double-digit hike

Digital and e-commerce companies are expected to offer double-digit average increments in FY22, states the survey. However, it is likely to be the lowest in sectors like hospitality and real estate companies.