Average India increment expected to increase to 9.1 percent in 2022 from 8.0 percent in 2021, per the 2022 Workforce and Increments Trends Survey by Deloitte Touche Tohmatsu India LLP.

Mumbai, 2 March 2022: Phase-1 of the 2022 Workforce and Increment Trends survey by Deloitte Touche Tohmatsu India LLP (DTTILLP) provides India-specific insights on increments, workforce composition, performance management, and other HR strategies.

Increment analysis

According to the survey findings, almost all organisations are planning to give increments in 2022, compared with 92 percent in 2021 and only 60 percent in 2020. Average India 2022 increment is expected to go up to 9.1 percent from 8.0 percent in 2021. The 2022 projected increment is higher than the pre-COVID-19 increment in 2019 by 50 BPS. Per the survey results, in 2022, 34 percent organisations are planning to give double-digit average increments, compared with only 20 percent in 2021 and 12 percent in 2020. Employees at junior management are, on an average, expected to receive a double-digit increment in 2022.

The study finds that 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. FinTech, IT-product companies, and digital/e-commerce organisations are expected to give double digit increments in 2022.

Anandorup Ghose, Partner at DTTILLP, said, “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 in activity, as well as hiring and attrition, companies have surpassed pre-pandemic levels of increments, with a sharp focus on retention of talent through rewards.”

Other key findings from the survey

Ninety-two percent organisations 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 organisations are expected to differentiate increments by levels of management (with senior management getting a lower increment than relatively junior employees). 45 percent are planning to differentiate increments of their employees based on their current compensation positioning with respect to the market. 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.

Anubhav Gupta, Partner at DTTILLP, said, “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. 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 medium to long term.”

Pan India, the average attrition has increased from 15.8 percent in 2020 to 19.7 percent in 2021, with voluntary attrition going up by more than 5 percent between 2020 and 2021. To tackle the “great resignation”, some organisations are also undertaking retention strategies, such as market corrections, higher increments, and one-time bonuses. More than 90 percent organisations are planning to pay bonuses in 2022. Four out of every 10 organisations are planning to pay more than 100 percent of the target bonuses. Apart from financial incentives and rewards, organisations are also looking to enhance employee retention through job enrichment, career management, and employee upskilling.

The survey also found that only seven percent organisations currently consider Environmental, Social and Governance (ESG) factors while formulating their rewards and incentives programmes. Gender diversity ratio, too, at an all-India level remains skewed (only one in four employees is a woman). The survey also indicates the constant evolution of the corporate workforce with Gen-Zs (born after 1994) currently constituting about 20 percent of white-collar employees and more than half of the total workforce being millennials.

The 2022 Workforce and Increment Trends survey was launched in December 2021 as a B2B India-specific survey. The primary audience for this survey were seasoned HR professionals. Almost 450 organisations participated in this edition, spread across seven sectors and 27 sub-sectors. The responses received from the participants were validated and checked for accuracy and intended interpretation. India, wherever mentioned in the document, reflects the collective views of only the survey participants.

Kindly note that 2022, 2021, 2020, and 2019, wherever used in this press release, refer to the 2022-2023, 2021−2022, 2020−2021, and 2019−20 fiscal years, respectively.

Notes to the editor for reference purposes only
This press release has been issued by Deloitte Touche Tohmatsu India LLP.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.