With employers the world over trying to cut costs and focus on profitability and sustainability, workers everywhere are uncertain about their future. With inflation showing no signs of dropping anytime soon, employers want to save money, while employees want more money to make ends meet. In India, however, 78 per cent of workers received an increment in the last one year. That is not all, a whopping 90 per cent expect an average increment of 8.4 per cent in the next one year!
According to a study by ADP Research Institute, over six in 10 (62 per cent) workers, globally, got a pay hike last year, with Latin American workers most likely to have received a hike (69 per cent) and only about 60 per cent Asian workers likely to have received a raise. The average raise was 6.4 per cent, way less than the 8.8 per cent global inflation predicted by the International Monetary Fund (IMF) for 2022. Again, Latin Americans received the highest pay hikes (of 7.7 per cent on average), while Europeans were given the lowest (at 5.4 per cent on average).
Are employees satisfied?
Do these pay raises satisfy the employees? The ‘People at Work 2023: A Global Workforce View’ report says that about 44 per cent of workers feel they are underpaid for their job. The figure is even bigger for Europe, where 51 per cent of employees feel they are not paid enough. In North America, 50 per cent of workers believe they are underpaid. That means, the expectation and demand for a raise will not come down in the next one year either.
About 62 per cent are sure they will receive a hike, while 41 per cent are confident of a bonus in the next one year. If their current organisation fails to grant them that bonus or hike, these workers will simply move on to another job where they are sure their expectations will be met. Over 83 per cent of workers are confident they will get a higher salary over the next one year, either from their existing organisation or from a new employer. The average expectation in terms of pay hike is 8.3 per cent. At least 34 per cent expect an increment of at least 10 per cent this year.
When asked how much their salaries had increased, if at all, over the last one year, and how much they would expect in terms of a hike over the next one year, the responses received were interesting. About 66 per cent of workers in Australia said they received an average hike of five per cent, while 50 per cent of workers in China received an average hike of 5.8 per cent. About 78 per cent of workers in India received an average increment of 7.2 per cent, while in Singapore, 70 per cent of workers enjoyed a 5.5 per cent hike in salary.
About 75 per cent Australian workers, 83 per cent Chinese workers and 79 per cent workers in Singapore expect an increment over the next one year. Here again, Indian workers lead — 90 per cent of employees in India are expecting their salary to increase over the next year (net).
What if employers cannot grant hikes?
Can employers unable to grant increments be able to satisfy their employees in any other way? About four in 10 workers said if not a pay hike, they should be given more paid leaves. A significant 39 per cent admitted they would be satisfied with more paid leaves. About 32 per cent would be satisfied with shorter work weeks, while 28 per cent would be happy with grocery or shopping vouchers. About 26 per cent admitted that a one-off grant of a lump sum amount to help deal with the rising cost of living would be welcome.
What is needed is a way to reward employees in a cost-effective manner so that both parties — employers and employees— benefit.