The good news is there’s total consensus more companies would be willing to roll out increments in 2021 compared with 2020. There’s less of a consensus in the amounts but most HR consultancies forecast an increase of about 7-7.7% in 2021. In sum, 2021 could be a good year for corporate executives with Anandorup Ghose, partner, Deloitte India, estimating that 92% of companies plan to reward employees financially versus only 60% in 2020.
However, what could set 2021 apart is that only star performers and target achievers would be rewarded and not all employees. “This year will see an acceleration of the existing trend of sharper differentiation and more incentive-based awards than fixed cost increases,” Ghose told FE.
Sudeep Sen, Business Head, TeamLease Services, believes the approach will be to pay for skills and KPI achievements. “Due to the epidemic-induced situation, multi-tasking and remote work were at a high level. Those who have demonstrated the ability to adapt and perform will be given more remuneration than the general crowd and which will also take precedence in the coming year, ”said Sen.
As per the first phase of the 2021 Workforce and Increment Trends Survey by Deloitte Toche Tohmatsu India LLP, an average growth of 7.3% in 2021 is expected to be achieved in 2021 which will be significantly higher than 4.4% in 2020. Global professional services firm Aon Consulting reported an average growth of 7.7% this year, again larger than the 6.1% of companies.
TeamLease Services believes the average growth may be small or slightly lower. For the executive level, the estimated median is 7%, 0.1 to 0.15% lower than in 2020. For middle management, professional and support staff, wage growth may remain flat by 7.3% in 2021, or less, compared to 7.5% in 2020.
Despite better wage growth, for most companies, the increase in the wage bill will be equal to or less than the budget for wage increases; It suggests a tough stance on the strength of his team.
Ghosh points out that companies are cautious in an economic environment in which the top-lines have not increased significantly. For a group of 3,900 odd companies, revenue in Q3FY21 grew by only 2.5%. “In such an environment, employers are caught in a bind. There is a significant push to retain key talent as well as manage costs as aggressively as possible, ”he explained.