Salary Appraisals 2024: India, Inc. Balancing Compensation and Retention Strategies
Statistics reveal that approximately 15% more employees actively explore better prospects during this appraisal season, hoping for a pay increase after their review. Many companies have already announced salary hikes, forecasting average growth ranging from 9% to 10%. While this increment may seem incremental compared to last year’s figures, it signals a return to pre-pandemic levels.
The year 2023 has been marked by geopolitical tensions, rising inflation, a deepening funding winter for Indian startups, significant IT layoffs, and the ongoing resistance to bringing employees back to the office. As we step into 2024, the outlook appears slightly brighter. With the financial year drawing to a close, March and April become the pivotal months when industries conduct their annual performance evaluations. Employees across sectors eagerly await their annual performance appraisals, akin to the anticipation of monsoon rain. During this period, job hiring slows down as employees eagerly await their appraisals before seeking new opportunities.
Salary Projections and Sector Variations
Statistics reveal that approximately 15% more employees actively explore better prospects during this appraisal season, hoping for a pay increase after their review. Many companies have already announced salary hikes, forecasting average growth ranging from 9% to 10%. While this increment may seem incremental compared to last year’s figures, it signals a return to pre-pandemic levels. However, the increment rate is not uniform across the board due to India’s large and complex market, with different sectors performing differently.
- IT Services Sector: Experiencing a slowdown due to decreased demand from the western market.
- Start-up Space: Facing a funding freeze, with companies focusing on profitability and resource optimization.
- BFSI (Banking, Financial Services, and Insurance) Sector: Thriving as the economy formalizes, with infrastructure growth driven by increased government spending.
Attrition Challenges
Post-appraisals, attrition rates spike significantly. A large portion of employees cite unsatisfactory appraisals as the reason for seeking new jobs. The two primary reasons for voluntary attrition are:
- External Inequity: Employees compare their pay to competitors in the same industry or market.
- Internal Inequity: Some employees feel unfairly compensated compared to their peers within the same organization.
Shifting Job Market Dynamics
The current job market favors job seekers. Digital platforms empower candidates with insights into potential employers. Professionals actively pursue better opportunities, often receiving substantial salary increases (ranging from 20% to 100%) during job changes.
Unlike past crises (such as Y2K or the 2008 recession), today’s job market is different. Premiumization is the trend, with niche skilled employees receiving premium compensation. Skills premium, especially in high-demand digital talents, drives higher salaries.
Key Retention Strategies
- Reducing Employee Turnover: Organizations emphasize employee benefits and wellness. Promotions retain talent, and top performers receive enhanced benefits, perks, and job variety.
- Personalized Career Development: Investing in professional growth keeps employees engaged.
- Beyond Monetary Compensation: Non-monetary benefits (flexible work arrangements, career advancement, health programs, etc.) attract and retain talent.
- Skill Development: Bridging skill gaps enhances retention and nurtures long-term success.
- Recognition and Rewards: Regular feedback, evaluations, and rewards boost morale.
India’s Growth Trajectory
Looking ahead, India’s trajectory remains promising. The IMF forecasts robust growth. As the economy scales new heights, the corporate sector must balance fiscal prudence with employee well-being. In this complex tapestry of aspirations and economics, 2024 stands as a testament to India’s resilience and unwavering pursuit of progress on the global stage
Stay tuned, to PropleManager.co.in for further updates on the evolving workplace paradigm.
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