Future of Pay 2024 shows 9.6% average salary hike with dropped attrition for India Inc in 2024
The industry with the largest anticipated wage growth in 2024 is e-commerce, at 10.9%. With a predicted growth rate of 10.1%, financial services is anticipated to come in second. The wage for professional services is expected to increase by 10% by 2024.
According to the EY study, India Inc. is expected to experience a 9.6% average pay increase in 2024, which is comparable to the actual growth in 2023.
With the release of the second edition of the “Future of Pay” report, Abhishek Sen, Partner and Leader, Total Rewards, HR Technology and Learning, People Advisory Services, EY India, stated, “We provide industry stakeholders with a compass to navigate the ever-shifting landscape of Total Rewards.”
According to Abhishek Sen, “some industries, including e-commerce, financial services, and professional services firms, are poised for significant pay raises in 2024, even though the overall average salary increase at India Inc. holds steady compared to last year.”
“To drive better ROI across all industries, there is also a discernible trend towards embracing a more comprehensive Rewards Value Proposition (RVP),” added Abhishek Sen. In the future, businesses will use AI’s revolutionary potential to create custom benefit plans, streamline the award system, and improve worker happiness in general.
The EY Future of Pay- 2024 report highlights the following findings:
- The industry with the largest anticipated wage growth in 2024 is e-commerce, at 10.9%.
- With a predicted growth rate of 10.1%, financial services is anticipated to come in second.
- The wage for professional services is expected to increase by 10% by 2024.
Key Highlights
1. Technology Workforce
The EY report indicates that digital talent comprises between 35 and 40 percent of the IT workforce and is anticipated to become increasingly crucial in the coming years.
Professionals with specialized talents, such as blockchain, machine learning, and artificial intelligence, can command a premium of between 30% and 50%. These skills are in high demand.
2. Attrition slope across sectors
The EY report claims that internal company strategy and macroeconomic factors have caused fluctuations in attrition rates in India. From 21.2% in 2022 to 18.3% in 2023, overall attrition decreased.
Financial services (24.8%), professional services (24.2%), and information technology (23.3%) saw the greatest attrition rates in 2023.
This year, voluntary attrition decreased slightly, while involuntary attrition rose, particularly among global companies, indicating layoffs in the IT and startup sectors due to global economic changes.
3. Total Rewards Shift
The significance of “pay and benefits” and the necessity of eschewing traditional employee perks for the current workforce were stressed by about 80% of the firms. Benefit cost planning (43%), employee wellness (29%), and assessing and complying with industry standards (20%) are the top three areas of concentration for companies. Variable pay plans (non-sales) account for 43% of all incentive programs given by the company, with discretionary incentives coming in second at 32% and sales incentive plans at 21%.
Executives (CXOs) usually receive the highest variable compensation among job levels, according to the research, although their anticipated wage increases for 2024 are less than those for 2023. For 2024, variable pay percentages are expected to fall for the majority of staff levels, with the possible exception of the lowest-paid tiers, which may witness a minor increase. In 2023, companies awarded variable bonuses that, on average, amounted to 15.05% of the fixed yearly salary of their employees.
4. Long-term incentive plans : more diverse, flexible
The study made clear that in recent years, businesses have been ingeniously redesigning their long-term incentive programs (LTIPs). In FY23, almost 26% of employers turned to long-term incentive plans (LTIPs) instead of cash compensation for performance rewards. Additionally, there has been a noticeable rise in the adoption of this rewards component among non-CXO cadres, mostly due to India’s rapidly expanding new age digital enterprise market.
5. Top talent shift
Work-life balance, productivity, and contentment are all improved by hybrid work cultures, which are becoming more and more popular. A number of industries are seeing unusual employment practices, such as the financial services industry’s creation of ESG teams. ESG reporting is becoming more and more popular among Indian businesses; 60% of them either currently use ESG practices or are in the process of doing so.
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