Consolidation/merger of businesses by telecom service providers will lead to talent instability across industries.
The growing competition in the Indian telecom sector has brought down the revenue and profit figures for telecom companies. This, in turn, has affected the salary increments for the employees in theses companies. In 2017, the salary increment was 7.5 per cent, which is the lowest for employees of telecom companies.
However, according to a report by Aon Hewitt, in 2018, the increment will be more than that of 2017. Aon Hewitt estimates that employees will get a salary increment of 8.4 per cent next year. The telecom companies will give a salary hike to attract and retain talent as the competition in this sector is increasing.
Also, some of the telecom service providers are going to merge and consolidate their business— Vodafone India and Idea Cellular are going to merge soon. This will lead to talent flux across the industries, and companies will work on attracting and retaining them by offering attractive compensations.
The top performers in telecom companies would get 1.8 times the average salary increment. These top performers will be from teams working in digital businesses, such as mobile banking, health and education, data marketing, analysis of customer strategy and market segmentation.
The total employee base in the telecom sector has decreased due to the alignment of workforce and right-sizing in the past one year. The staff costs make up less than five per cent of the revenue.
Aon Hewitt has also projected a wage increase of 9.6 per cent in 2018, for India Inc., which in 2017 was 9.4 per cent only.
Experts from EMA Partners say that after the merger, telecom operators could roll out a 10 to 13 per cent raise for employees to retain them instead of eight to nine per cent that was paid across hierarchy.
Also, companies could offer retention bonuses to the management and the key talents in the merged entities.
For employees in telecom, the increment will depend on the kind of profile. Companies will give increments to the top management and senior people to retain them. The employees possessing skill sets suited for only telecom may have a hard time because of the limited demand in the job market.