with him economic recovery In tow and steadily improving confidence, a survey was released that highlighted the potential pay raise for employees in 2022 Deloitte The Workforce and Increment Trends Survey has shown that the average salary increment of employees next year is going to be around 8.6 percent, according to preliminary estimates. If this happens, wage increases for 2022 will reach pre-pandemic levels, as it was in 2019.
About 25 percent of the companies surveyed have forecast double-digit growth for the coming year, the report said. It is also worth noting that as per the survey findings, in 2021 around 92 per cent of the companies gave salary hike which averaged to 8.0 per cent. Now to get an idea of the level of growth, in 2020, during the pandemic, only 60 per cent of companies increased the wage hike for employees and that too at only 4.4 per cent.
Anandorup Ghosh, a partner at Deloitte Touche Tohmatsu India LLP, said, “While most companies anticipate higher wage growth in 2022 compared to 2021, we continue to operate in an environment where uncertainty related to COVID-19 persists. Which makes it difficult for companies. Forecast.”
“Some of the survey respondents have also called off their 2021 wage hike cycle, so 2022 wage hike is quite a long way off for them. The GDP forecast for FY 2021-22 was revised after the second wave and we expect the organization to closely watch similar growth next year while managing its fixed cost growth,” Ghosh said. .
It is also worth noting that the Information Technology (IT) sector was found to be the one sector that could offer the highest wage growth in 2022. The life sciences sector was following it in terms of the level of growth. The IT sector is also the only sector that is expected to expand double digit growth with the highest of all increments potentially coming from digital/e-commerce companies. On the opposite end of the spectrum, it found that the retail sector, as well as hospitality, restaurant, infrastructure and real estate companies, projected some of the lowest wage growth in their respective sectors to continue.
Keep in mind that not all employees will get the same pay increase, as it was mentioned in the survey report that these organizations will continue to have different pay increases which will depend on the parameters of skill and performance. Having said that, top performers can expect to see a salary increase of up to 1.8 times that of an average employee.
Anubhav Gupta, Partner, Deloitte Touche Tohmatsu India LLP, said, “For many years, organizations have been trying to balance employee cost with what is best for their employees in tough times. It is heartening to see that most of the companies are increasing the salary hike in 2021 even in those areas which have not fully recovered yet. Going forward, job-specific pay increment differentiation may become more prevalent as dropout rates vary significantly across different skills. Compensation is usually one of the top reasons for attrition, especially at the junior management level, where virtual hiring has made it easier to jump ship. “
Now, in terms of promotions, it was estimated that around 12 per cent of the employees were promoted in 2021, while it was less than 10 per cent in 2020. To update your bonus or variable pay plans to align with the reward structure. On the hiring side of things, it was found that 78 per cent of the companies said that they have started hiring at the same pace as they did before the Covid-19 pandemic.
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