Mumbai: According to the phase 2 of the 2020 Workforce and Increment Trends survey by Deloitte (DTTILLP), the average annual increment numbers hit the lowest in decades with average increment in India falling from 8.6 per cent in 2019 to 3.6 percent in 2020 that translated to only 4 of 10 surveyed companies in India have given an increment in 2020, while 33 percent of the companies have decided not to give an increment at all. This comes when reports suggest 1.89 crore workers losing their jobs since the month of April
Anandorup Ghose, partner at DTTILLP, said, “Pay increases have been slowing in India over the past few years in line with the trajectory of the economy and rising margin pressures. However, with COVID-19 pulling the global economy into a recession, organisations have had no choice but to reduce or halt increments as they evaluate every incremental rupee spent. When revenues are harder to come by, companies usually go into a cost-saving mode.”
The survey points out that less than 10 percent companies have given an increment equal to or more than 10 percent in 2020 and the proportion of such companies has dropped drastically since the start of the lockdown in March 2020.
Increments were the highest in the life sciences sector and the lowest in the manufacturing and services sector (particularly in the real estate, construction, metals and mining, hospitality, retail, and automobiles industries). The digital/e-commerce industry, which is known for giving double-digit increments, has struggled to match its past figures, the survey said.
“Prior to the lockdown, increment decisions have largely been backward-looking with the past year’s performance determining the increment budgets. COVID-19 has brought a big change to the process this year. Organisations are taking into account the likely future performance while deciding increment budgets,” Ghosh said.
The survey also asked organisations in India if they plan to give increments in 2021; only 23 percent companies said yes. “Given the uncertainty in the business outlook, most companies across sectors have not taken a definitive stance on 2021 increments yet and will decide on the basis of future performance,” it said.
According to Deloitte, about 350 organisations participated in this edition spread across seven sectors and 25 sub-sectors.