Cheer for employees! 92% companies will offer pay hike this year

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There’s going to be more money in your hands with as many as 92% of the 400 companies surveyed by Deloitte India saying increments are on the cards. According to a report released by Deloitte India this week, an average increment of 7.3% is expected across sectors.

A  sectoral break up is given below:

Anandorup Ghose, Partner, Deloitte India, said while 92% of companies doling out increments may seem high, it is not at par with the increment trends observed in earlier years.

“92% implies that there are still some sectors and companies suffering. We have seen over 99% companies giving increments in earlier years,” he said.

However, this figure was at a mere 60% last year in the wake of the pandemic.

The report suggests the expected 7.3% increment is lower than the average of 8.6% seen in 2019, and way below the double digit increment trend seen for years pre-2018.

“If you look at the history of pay rises in India over the last 20 years, 7.3% is among the lower increases. But if you contrast that with what we saw last year, it is almost double of the 3.9% average increments offered in 2020,” Ghose said clarifying that this increment is on pre-Covid salary levels and not the salary cuts that the pandemic led to.

From the data available with Deloitte India, Ghose said “IT product companies should expect double digit increments this year,” without mentioning specific companies.

On the consumption side, increased salaries beating inflation may lead to greater consumption.

Ghose points out that given last year’s health scare, people may choose to save more money for the rainy day. “CPI inflation right now is trending around 4%. If you look at it from that perspective, it implies that there is more money in the hands of the people which may lead to more consumption. But there will be a lot of focus on savings for sure. The bigger questions is where and how because interest rates are not at their highest,” he added.

On the number of women in the workforce at a meagre 22% as revealed in the report, Ghose said it was in fact an improvement over the last few years. “22% is a positive trend. Even last year, this number was 21%. IT and services are bigger employers of women as compared to Manufacturing where we see fewer women,” he said.