New Delhi: Indian companies are expected to dole out an average increment of 9.1 percent in 2022, higher than the pre-Covid-19 increment in 2019, as companies are focusing on retention of talent through rewards.

According to the 2022 Workforce and Increments Trends Survey by Deloitte Touche Tohmatsu India LLP, the average India 2022 increment is expected to go up to 9.1 percent from eight percent in 2021.

Moreover, the 2022 projected increment is higher than the pre-Covid-19 increment in 2019 by 50 basis points (bps).

A basis point is equal to 1100th of a percentage point. "Corporate India reacted differently to each Covid-19 wave.

"In 2020, the pandemic pulled the economy in a recession, and lower increments, pay cuts, and hiring freeze were common. In 2021, increments were higher, pay-cuts were reversed, and Covid-19-specific benefits were introduced.

"However, in 2022, in line with the pick-up inactivity as well as hiring and attrition, companies have surpassed pre-pandemic levels of increments, with a sharp focus on retention of talent through. rewards," said Anandorup Ghose, partner at DTTILLP

Almost 450 organizations participated in the 2022 Workforce and Increment Trends Survey.

Moreover, in 2022, 34 percent of the organizations surveyed are planning to give double-digit average increments, compared with only 20 percent in 2021 and 12 percent in 2020. The study finds that in 2022, increments are expected to be higher across all major sectors, compared with 2021, and the pre-pandemic levels observed in 2019.

Life sciences and IT sectors are likely to give the highest increments in 2022. Finance technology, IT product companies, and digital/e commerce organizations are expected to give double-digit increments in 2022. Ninety-two percent of the organizations are expected to use individual performance to differentiate increments across employees, with top performers expected to get 1.7 times the increment given to average performers. More than half the organizations is expected to differentiate increments by levels of management (with senior management getting a lower increment than relatively junior employees).

The percentage of employees to be promoted is expected to increase from 11.7 percent in 2021 to 12.4 percent in 2022, with the average additional increment to those promoted expected to be 7.5 percent in 2022.

"While the 2022 increment of 9.1 percent is only for existing employees, the overall employee cost could go up by an even Higher amount, owing to factors such as incremental hiring, one-time pay corrections, and retention bonuses," Anubhav Gupta, partner at DT TILLP said.

Gupta further noted that "increments are currently being driven, predominantly by the local labour market conditions. Where increments go from here on will be a function of economic viability and fundamental business growth over the med um to long term

Source- PTI