India Inc hands out higher pay hikes to employees

As the economic impact caused by the Covid-19 second wave seems to subside, India Inc is providing higher increments than it initially planned to its employees, according to a report in The Economic Times.

A huge chunk of people lost their jobs and saw their livelihood get disrupted after the Covid-19 pandemic ravaged the Indian economy early last year. However, with declining cases and restoration of economic activities, business is expected to be back on track.

As per the ‘Covid-19 Impact and HR Trends’ survey by human resources consulting firm Omam Consultants the actual average salary increment for 2021 across companies in the country was 7.9% against 7.3% they had projected in March.

The experts believed that the higher increments are attributed to the overall economy doing better. Many companies revised their salary increments upwards as green shoots appeared for their respective sectors. In most organisations, increments were rolled out during the last leg post the second wave, assuming the worst is over.

“For India Inc, it has been an extremely dynamic market since initial salary projections came out earlier this year,” said Padmaja Alaganandan, chief people officer at PwC India.

Worst is over

“Vaccination surely has a role to play.  One important factor was that most of the rating agencies maintained a positive outlook about India post the second wave,” said Anil Koul, director-HR consulting at Omam Consultants.

The survey covered more than 100 medium and large companies across 13 sectors including e-commerce, core, manufacturing, engineering, retail, IT/ITES, telecom, FMCG (fast-moving consumer goods), consumer durables, auto, chemical, pharmaceutical, and BFSI (banking, financial services and insurance).

“The hike this year was more than projected. It is a function of primarily two factors: one, the overall markets are doing better and two, we want to make it up to employees as we skipped one year’s increment,” Sudhir Dhar, executive director-human resources at Motilal Oswal Financial Services, said.

“In comparison to the gloomy days that we experienced last year, this is good news for sure,” said Pankaj Bansal, cofounder of PeopleStrong.

He believes this is just the beginning as with sectors like auto looking up, there is hope for better days ahead.