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Deloitte’s 2021 Workforce and Increment Trends Survey - Phase 2

Average India increment at 8.0 percent in 2021; early estimates for 2022 projected increment at 8.6 percent per the Workforce and Increments Trends Survey by Deloitte

Mumbai, 20 September 2021: The second phase of Deloitte’s Workforce and Increment Trends survey 2021 provides India-specific insights on rewards, impact of COVID-19 on benefits policies, and return to work strategies of organisations. Phase-1 of the survey was released in February 2021.

Rewards Analysis

According to the survey findings, 92 percent companies gave an increment in 2021 at an average of 8.0 percent compared with only 4.4 percent in 2020 where just 60 percent companies had extended a pay hike. Early estimates reveal that average increment for 2022 is expected to increase to 8.6 percent in line with a healing economy and improving confidence. If this holds true, increments in 2022 would reach the pre-pandemic levels of 2019. About 25 percent companies surveyed have projected a double-digit increment for 2022.

Anandorup Ghose, partner, Deloitte Touche Tohmatsu India LLP, said, “While most companies are projecting a higher increment in 2022 compared to 2021, we continue to operate in an environment where COVID-19 related uncertainty persists, making it harder for companies to forecast. Some of the survey respondents have also just closed their 2021 increment cycle so 2022 increments are a fair distance away for them. GDP forecasts for FY 2021-22 were revised down after the second wave and we expect organisations to closely watch similar developments while managing their fixed cost increases next year.”

The survey indicates that in 2022, the Information Technology (IT) sector is likely to offer the highest increments, followed by the Life Sciences sector. IT is the only sector that is expected to extend double-digit increments with some digital / E-commerce companies planning to give some of the highest increments. Retail, hospitality, restaurants, infrastructure, and real estate companies continue to project some of the lowest increments in line with their business dynamics. Not all employees are expected to get the same increment as organisations continue to differentiate pay increases by skills and performance. Top performers can expect about 1.8 times the increments given to average performers.

Anubhav Gupta, partner, Deloitte Touche Tohmatsu India LLP, said, “Organisations are trying to balance employee cost with what is best for their employees in what have been a difficult couple of years for many. It is heartening to see most companies extending increments in 2021 even in sectors which have not fully recovered yet. Going forward, function specific increment differentiation may become more prevalent as attrition rates vary significantly across different skills. Compensation is usually one of the top reasons for attrition, particularly at a junior management level, where virtual hiring has made it easier to jump ships.”

Approximately 12 percent employees were promoted in 2021 as compared to 10 percent in 2020. Almost 12 percent companies have updated their bonus or variable pay plans to align their rewards structures with the changing priorities. With respect to hiring, 78 percent companies stated that they have started recruiting at the same pace as they used to prior to COVID-19.

Other key findings from the survey
About 60 percent organisations updated their health insurance policy due to COVID-19 and 24 percent organisations readjusted their life insurance policy. Most organisations that updated their insurance policies, either introduced a COVID-specific claim or increased the coverage amount for their employees. Almost 2 out of every 3 organisations readjusted their leave policy and introduced special leaves of 14 to 21 days, over and above the regular annual paid leaves. Almost half the respondents provided some sort of monetary compensation to the family of the employees who lost their lives due to COVID-19.

As far as return to office is concerned, only 25 percent companies have conducted an employee preference survey to decide their return to work strategy. The IT sector has been the most proactive is assessing employee preferences with regards to the desired workplace. In most cases where such a survey was conducted, employees seem to prefer a hybrid work arrangement (combination of work from home and office, wherever feasible). However, at an all India level, only 40 percent organisations have finalised their return to work strategy.

While most organisations have not finalised their return to work strategy, almost 90 percent organisations said that they are likely to finalise a hybrid model in future. Providing permanent flexibility to the employees on when and how much to opt for work from home was not a popular choice, however. Approval from line managers or setting limits on the number of days working from home were the more common alternatives preferred by companies. Just 1 percent of the organisations are likely to use an only work from home model. 88 percent companies are not planning to allow their employees to work from any location on a permanent basis. As organisations proceed towards embracing the new normal, some leading organisations are also taking specific initiatives to prepare managers to lead teams in a virtual/hybrid workplace model and drive collaboration through training programmes.

“Previously, the organisations used to decide who can work from home; they are now deciding who can / should work from office. While the hybrid model seems to be the preferred choice, there are critical questions around employees’ health and safety, flexibility and choice, governance, data security, business continuity, collaboration, team work, and culture that need to be carefully thought through before finalising a robust return to work strategy,” Anandorup Ghose added.

About the survey:
The 2021 Workforce and Increment Trends survey was launched in July 2021 as a B2B India-specific survey. The primary audience for this survey were seasoned HR professionals. More than 450 organisations participated in this edition spread across seven sectors and 24 sub-sectors. The responses received from the participants were validated and checked for accuracy and intended interpretation. The (statistical) information regarding companies, wherever mentioned in the document, reflects the collective views of only the survey participants, other specifically mentioned otherwise.
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 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 for a more detailed description of DTTL and its member firms.

Media contact

Spriha Jayati
Deloitte Shared Services India LLP
Tel: 9323744249

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