Average Salary Increment to drop to 9.1 percent in 2023 : A Survey Report
One in every three organizations is planning to give double-digit average increments, according to the Deloitte India Talent Outlook 2023, which includes the viewpoints of CHROs at 300 organizations across seven sectors and 25 sub-sectors, but Average Salary Increment to drop to 9.1% in 2023.
Average Salary Increment to drop to 9.1 percent in 2023 : A Survey Report
The performance appraisal is in progress for the financial year 2022–2023. The companies are preparing their final profit-and-loss ledger for their business outcomes in 2022–2033, which, in the end, will reflect the overall business performance of the organization for the fiscal year.
Similarly, the workforce is also expecting to have a good salary hike this year to meet their personal financial goals in 2023. But can the companies deliver up to the employee’s expectations of a good raise this year? It will all depend on organizational business performance.
However, it may not be as same as expected; a survey conducted by Deloitte India illustrates a drop in the annual increment for FY 2022–23.
The average increment of employees in India is likely to drop to 9.1 percent in 2023 from 9.4 percent in 2022, a Deloitte India study says.
One in every three organizations is planning to give double-digit average increments, according to the Deloitte India Talent Outlook 2023, which includes the viewpoints of CHROs at 300 organizations across seven sectors and 25 sub-sectors.
The findings indicate that increments in 2023 will be lower across almost all sectors, compared to 2022’s actual increments.
One of the highlights is that the IT sector is likely to witness a major drop in increments as compared to 2022. Additionally, attrition in India reached 19.7 percent in 2022, up from 19.4 percent in 2021. However, the forecast is optimistic for the Life Sciences sector, which is expected to witness the highest increases in 2023.
Anandorup Ghose, a partner at Deloitte Touche Tohmatsu India LLP, said, “The high levels of attrition across industries in late 2021 continued until the end of the year.” We saw Indian organizations budgeting the highest increment for 2022 over the last four years. “What they also did was hire aggressively.”
This led to employee costs rising faster than revenue growth over the last 3–4 years in almost every other company. Stubborn inflation, higher interest rates, and a slowing economy are likely to make organizations more cautious this year. “We expect increments and attrition to witness lower trends in 2023.”
Learning and development trends
The study further points out that, amid the uncertainty of the future of work, organizations must deploy a “common skills” framework to identify gaps in their existing talent capability and fuel a wide range of talent-related decision-making
Although the majority of organizations recognize the value of an integrated skill framework chiefly for learning and development and career progression, nearly half of the organizations do not typically update their framework to accommodate fluctuating business needs.
The survey identifies a major skill gap. According to the study, nearly 19 percent of organizations, primarily in the IT, ITES, and consumer sectors, confirmed that their employees have visibility of skills outside their current roles.
The factor stressed the need for upskilling and deskilling employees to plug holes in the segment. Again, 80 percent of organizations reported that their leadership teams have no structured data or reporting mechanisms to understand their current skill capital, as the findings suggest.
The study recommends improved employer-employee relationships to build the brand. To this effect, 27 percent of organizations have gone beyond their permanent workforce and invested in skills-based training for gig workers, while 13 percent reported planning to do so. It emphasizes the integration of non-traditional workers into the workforce to provide organizations with expanded access to crucial skills to survive in a rapidly changing marketplace.
Diversity and sustainability trends
As female participation rates across white-collar jobs gradually increased to 25.3 percent in 2022 from 24.1 percent in 2021, workplaces today are making conscious efforts to include talent from lesser-represented groups such as the LGBTQ+ demographic and neurodiverse talent.
This is a relatively recent development in the Indian job market. Incorporating expansive diversity, equity, and inclusion policies to foster a safer, more inclusive culture has greatly improved employer brand value—especially amongst Millennial and Gen Z talent.
Sustainability initiatives by firms are finding takers, the study says. Nearly 66 percent of respondents reportedly have an ESG framework that extends beyond a CSR policy, and 21 percent reported being in the planning phase of designing one. The scope of HR in helping organizations improve their ESG performance has been gradually expanding.
