Annual salary increases set to reach 8.6% in 2022: Deloitte poll
Average annual salary increases are expected to reach pre-pandemic levels of 8.6% in 2022, according to early estimates from Deloitte’s Workforce Trends and Increments Survey. In line with the gradual improvement in business confidence over the past few months, around 25% of companies surveyed predicted a double-digit increase in 2022, according to the report.
Following the pandemic-induced closures and travel restrictions in 2020, average pay increases have fallen to 4.4%. However, as corporate sentiment has improved in recent months, India’s average increases in 2021 are around the 8% mark, the survey noted.
The India-specific B2B survey was conducted in July 2021 with the participation of human resources professionals from 450 organizations across more than two dozen sectors and sub-sectors.
The survey indicates that in 2022, the information technology sector will likely offer the highest increases, followed by the life sciences sector. IT is the only industry likely to offer double-digit increments, with digital / e-commerce businesses at the top of the list. However, increases are expected to be moderated in the retail, hospitality, restaurant, infrastructure and real estate sectors in 2022.
In all organizations, salary increases will be uneven, with companies linking skills upgrading to performance. Top performers can expect 1.8 times the increases given to average performers, according to the survey.
In the future, differentiation of job-specific increments may become more prevalent, as attrition rates vary widely across skills, noted Anubhav Gupta, partner, Deloitte Touche Tohumatsu India.
Around 12% of employees were promoted in 2021, against 10% in 2020. Regarding hiring, 78% of companies said they started recruiting at the same rate as before the Covid-19 pandemic.
Almost 12% of companies have updated their bonus and variable compensation plans to align their compensation structure with changing priorities. About 60% of organizations surveyed have updated their health insurance policies due to Covid-19. Almost two out of three organizations have readjusted their leave policy and introduced special leave ranging from 14 to 21 days. About half of those polled provided some sort of monetary compensation to families of employees who lost their lives to Covid-19.
When it comes to the return-to-office strategy, organizations are still working out the details. Only 25 percent of organizations have conducted employee surveys to determine employee preferences. Across India, only 40 percent of organizations have fleshed out their return-to-work strategy, according to the survey. The IT industry has been the most proactive in assessing employee preferences for the desired workplace. The survey indicated that in most places, employees prefer a hybrid work plan. Some leading organizations are taking specific initiatives to prepare managers to lead teams in a virtual / hybrid workplace model and foster collaboration through training programs, according to the survey.