What will increments be like in 2020?

The average increment fell by 5 percentage points in 2020 from 8.6 per cent in 2019.


Due to the financial crunch, which has hit all sectors, many companies in India have decided to defer increments and bonuses for their employees while keeping regular salaries intact.

Only 23 per cent of the companies plan on giving increments in 2021. Many of them are yet to take a decision on the subject, and prefer to see the year through before arriving at any conclusion.

In fact, only four out of 10 companies in India have given any increments at all. In addition, less than 10 per cent companies have given an increment equal to or more than 10 per cent this year and their numbers have been decreasing as the year progresses.

Out of the total number of companies surveyed, 33 per cent have decided not to go ahead with increments.

According to the second report of the 2020 ‘Workforce and Increment Trends Survey’ by Deloitte Touche Tohmatsu India (DTTILLP), the average increment has dropped from 8.6 per cent last year to 3.6 per cent in 2020, which is one of the lowest in decades.

As pointed out by Anandorup Ghose, partner, DTTILLP, pay increments have been on a downward trend for the past few years and the onset of COVID-19 has further pushed organisations to bite down hard and focus on cost-saving measures.

Whatever organisations may have predicted in terms of increments would have taken a drastic turn as soon as the pandemic hit and companies started to cut costs. In fact, none of the industries, even the ones faring better than their counterparts throughout this crisis, have been able to match their past figures when it came to releasing increments.

This year has not seen an average double digit growth in any industry, even in the life sciences sector, where the increments were the highest, or the e-commerce industry, known for its double-digit increments. Increments offered were the lowest in the manufacturing and services sector, including real estate, construction, metals and mining, automobile and hospitality.

However, companies have provided their employees with other forms of compensation in lieu of deferred increments, such as engagement and digital-learning avenues. Many of them are even providing work-from-home allowances that allow employees to invest in home-office furniture and other necessities. These have been critical in keeping up the morale within organisations, as they have had to resort to a number of cost-saving measures including reduction in promotions, fewer employees in the ‘exceeds expectations’ category, revision of benefits and increased discretion while rolling out bonus pay cheques.

This report is part of the Deloitte Touche Tohmatsu Workforce and Increment Trends Survey launched in June 2020 as a B2B India-specific study. Insights and inputs were gathered from seasoned HR professionals across 350 organisations, across seven sectors and 25 subsectors.


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