That Time Of The Year
- Salary hikes: FMCG, auto, pharmaceuticals and healthcare, telecom, banking
- Salary cuts/no revision: Aviation, retail, IT, real estate, media, financial services, textiles
***
They say good things come in small packages. That’s certainly been true for Mumbai-based IT professional, Hari Singh. In March this year, the business outlook was so bleak that Singh’s second-rung IT company made it clear: no salary increments. Barely four months later, Singh—and several colleagues—were pleasantly surprised to receive a 6 per cent pay hike. That may not be much, but like Singh says, “Finally this year has brought good news—it’s better than what we hoped.”
Indeed, several companies across varied sectors are rethinking the general freeze on annual increments in a climate of belt-tightening across India Inc. Private sector banks (including the likes of HDFC Bank), consumer goods companies like Dabur, large corporate groups like the Aditya Birla Group among others have either rolled out increments or are in the process of sending out letters. “Looking at market trends, we have gone for both salary revision and bonuses, but there may have been some amount of decrease in increments,” says A. Sudhakar, executive director (HR) at Dabur, adding that the company has “honoured” both its revision cycles.
Many firms are also deferring the increment decision to the next quarter. “If the Q2 results are good and there is stability, we will take a decision on increments and promotions in October,” says Nandita Gurjar, group head, hrd, Infosys. Even though corporate results have generally been above par, the air of caution remains. ICICI Bank, for instance, says it is too early to say whether there will be increments or bonuses this year. Clearly, it’s not good news all around. Some sectors are a mixed bag, and some have seen pay cuts—like aviation, real estate and the retail sector—that are unlikely to be reversed any time soon.
But sectors like automobiles and FMCG that have braved the downturn can afford to be kind to employees. For some companies, the whittling down of the panic over finances is reason enough. “Companies that have large exposure to the domestic market have not been impacted much by global events, and their employees have continued to help the company grow competitively. So it is obvious there has to be a reward for that hard work,” says Dr Santrupt Mishra, director group HR, Aditya Birla Group.
There is an important caveat: the salary hikes are not huge. If the range of increases ran from 10-60 per cent last year, this year that range has fallen to a more realistic 2-15 per cent. “Companies are taking cognisance of performance—and are rewarding accordingly,” maintains Purvi Sheth, CEO of HR firm Shilputsi Consultants. Clearly, extravagant salaries were considered a virtue last year—now, spending the money wisely on people whose skills are essential is the order of the day.
What has changed for HR managers is that they have to look at periodic reviews given the current environment. Even if the compensation increases seem modest now, it is also possible they will be revisited mid-year. “We expect the job market in India to start sharing bullish trends by the end of the year,” says Mandeep Maitra, country head (HR) at HDFC Bank who describes the current situation as a “temporary phenomenon”. Clearly, for some, things are improving. When will the small joys spread to other sectors?
By Arti Sharma in Mumbai with Arindam Mukherjee
