Overview: Salary Increments in 2020 and forecast for 2021
India Inc offered the lowest ever salary increments to employees in 2020 as COVID-19 disrupted the economy. According to an Aon Survey the ‘Salary Trends Survey 2020 – 2021, the average salary hike in 2020 stood at 6.1 percent, which is the lowest level seen in 25 years of the survey.
Survey says the previous lowest average salary hike in India was recorded in 2009 at 6.3 percent during the global financial crisis. The average salary increment by Indian Companies for 2021 has been forecast at 7.3 percent.
Sectors with the highest salary increase in 2020 include hi-tech, IT, pharma, and life sciences while hospitality, real estate, engineering services recorded the worst performance on salary.
In the year 2020, 29 percent of companies didn’t offer salary hikes while 46 percent gave increments in the range of 5 to 10 percent to their employees. In addition, 16 percent of the companies offered a salary hike of 10 percent.
According to LinkedIn reports, around two-thirds (67%) of major companies in India including PepsiCo, Maruti Suzuki. Whirlpool and ITC Limited have given bonuses, variable payouts, and incentives to employees this year, despite the pandemic’s impact on their businesses.
Toyota Kirloskar Motor handed out bonuses along with annual increments even as the auto industry has been among the worst affected, while logistics company Shadowfax is offering quarterly bonuses to its sales team.
Accenture has given pay hikes and bonuses to a majority of its 200,000 India employees and plans a significant level of promotions in the December cycle this year. The company didn’t disclose but sources told that salary increases for junior and mid-level employees were in the range of 6-11%.
TCS has announced salary hike for its workforce of 453,540 employees from 1st October 2020 as usual and also continued hiring freshers and training their staff in 2020. The salary increase was announced across all bands of employees and like the company had done in the past.
Infosys has rolled out salary increases and promotions across all levels effective 1st January. Infosys also said it is giving 100% variable pay along with a special incentive for Q2.
Wipro has announced 100% variable pay linked to business metrics for all employees for both the third quarter (October-December) and the fourth quarter (January-March) of financial year 2020-21 and Salary Hikes for B3 band employees comprise 80% of its 1.8 lakh employees. All the employees of C1 band and above will be considered for salary increments effective June 1, 2021.
The Aon survey forecasts that in 2021, 14 percent companies are unlikely to offer any salary hike but more companies are likely to reinstate compensation cuts carried out in 2020 due to the pandemic. 61 percent of companies are expected to offer salary rise in the range of 5 to 10 percent. Further, as many as, 15 percent of the companies are likely to offer 15 percent hike in compensation in new year 2021.
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