homepersonal finance NewsAverage salary hikes may touch pre pandemic levels in 2022; here's how much you can expect

Average salary hikes may touch pre-pandemic levels in 2022; here's how much you can expect

Average salary hikes may touch pre-pandemic levels in 2022; here's how much you can expect
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By CNBCTV18.com Sept 21, 2021 12:24:16 PM IST (Updated)

In 2021, 92 percent of the companies in India doled out average increments of 8 percent.

As economic activity picked up after states eased COVID-19 curbs, 92 percent companies in India extended average increments of 8 percent in 2021, reveals the latest Workforce and Increments Trends Survey by Deloitte.

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The study adds that going forward, firms in India are expected to give an average salary increment of 8.6 percent, up from 8 percent in 2021 and 4.4 percent in 2020 when just 60 percent of the companies had extended a pay hike. In fact, about 25 percent of the surveyed companies said they planned to extend a double-digit increment to employees in 2022.
The study says that the increment projection for 2022 is reflective of a healing economy while adding that if salary growth reaches 8.6 percent, then hikes in 2022 would reach the pre-pandemic levels of 2019.
Even with these bullish predictions regarding hikes, companies will continue to work in an environment where COVID-19 related uncertainty persists.
Anandorup Ghose, partner, Deloitte Touche Tohmatsu India LLP, said, "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 FY22 were revised down after the second wave and we expect organisations to closely watch similar developments while managing their fixed cost increases next year."
Besides, not all employees may share the same fortune. The survey points out that organisations will differentiate pay increases based on skills and performance. Therefore, top performers may get about 1.8 times the increments given to average performers.
According to the survey, the Information Technology (IT) sector is likely to offer the highest increments, followed by the Life Sciences sector. On the other side of the spectrum, retail, hospitality, restaurants, infrastructure, and real estate companies may extend some of the lowest increments.
Anubhav Gupta, partner, Deloitte Touche Tohmatsu India LLP, said, "Going forward, function-specific increment differentiation may become more prevalent as attrition rates vary significantly across different skills. Compensation is usually one of the top reasons for attrition, particularly at a junior management level, where virtual hiring has made it easier to jump ships."
Additionally, 78 percent of the 450 surveyed corporates said they have started hiring like pre-pandemic times. "Other key findings from the survey show that about 60 percent organisations updated their health insurance policy due to COVID-19 and 24 percent organisations readjusted their life insurance policy," the survey said.
After the COVID-19 outbreak, two-third of the corporates have changed leave regulations for 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," the survey added.
When it comes to calling employees back to the office, only 25 percent companies have conducted an employee preference survey to decide their return to work strategy while almost 90 percent organisations said that they are likely to finalise a hybrid model in future.
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