Updated March 14th, 2024 at 20:54 IST

1 in 3 cos to give double-digit salary hikes in 2024: Deloitte India

The average increment this year and the number of employees promoted is however lower than last year

Reported by: Business Desk
Employee increments | Image:Flickr
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Promotions in 2024: One in every three organisations is planning to give double-digit increments to its employees in 2024, as per a Deloitte India survey.

The average increment expected in 2024 is 9 per cent, which is lower than the 9.2 per cent raise employees got last year, according to the Deloitte India Talent Outlook 2024.

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These projections are higher than pre-COVID levels for all sectors barring Information Technology (IT) and BPO (Business process outsourcing) or call centres, and KPOs (Knowledge process outsourcing), as per the survey.

Amid a cross-sectoral lull in 2020, induced by a lockdown in almost all nations, IT services boomed the most since almost all business operations, schooling and services were made digital.

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The ‘opening up’ since 2022 has seen a sharp rise in aviation, hospitality and offline business levels, inversely impacting technology companies worldwide. AI automation is also one of the reasons for the post-pandemic IT slump.

Only 11.5 per cent of employees can expect a promotion this year, as against 12.3 per cent employees in 2023. 

Junior management employees will receive offer double-digit increments, but this will be segmented based on performance.

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It will also become harder for employees to secure top ratings as companies narrow their focus on bell-curve ratings, a performance management system used by human resource professionals and corporates.

The increments top-performers will receive will be almost twice of employees (1.8x) who are rated average.

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Employees who are rated below par will receive 0.4 times lower raises. This number was 0.6 times in 2023.

The attrition, or employees leaving organisations, was lower in 2023 at 18.1 per cent as compared to 20.2 percent in 2022, on the back of a slower hiring momentum.

In terms of performance bonus, companies will retain the 7.5 percent for promotions for retaining integral talent.

One out of two companies could pay bonuses which are at-target or above-target in terms of performance this year.

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 “The average employee in India has made peace with a single-digit increment over the past few years. With attrition and core inflation in check, organisations focus more on performance management strategies to protect and boost margins,“ according to Anandorup Ghose, Partner, CHRO Programme Leader at Deloitte India.

On a global scale, India continues to be the fastest-growing major economy and could witness the highest increment compared with other geographies, he added.

In terms of Learning and Development (L&D), three in every four organisations have a

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skills framework. These are however not updated by about 70 per cent of companies.

This is higher than only 19 per cent of companies tracking and maintaining skills demand and supply across jobs.

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Usage and cost efficiency takes a lead compared to learning initiatives, the study noted.

AI is also making its way into HR operations with 25 percent organisations using, or intending to utilise AI for hiring, engaging employees or using chatbots to respond to queries.

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Some leading organisations have also started deploying AI for performance management.

HR analytics is most used to map attrition, workforce planning, and employee engagement.

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Published March 14th, 2024 at 20:54 IST