The average India increment in 2023 is expected to go down to 9.1 per cent from 9.4 per cent in 2022, according to the Deloitte India Talent Outlook 2023. It added that one in every three organisations is planning to give double-digit average increments.
The report said that 2023 increments are expected to be lower across almost all sectors, compared to 2022 actual increments. “While the Life Sciences sector is expected to witness the highest increments in 2023, the IT sector will likely witness a major drop in increments as compared to 2022.”
The attrition rate in India reached 19.7 per cent in 2022, up from 19.4 per cent in 2021.
Anandorup Ghose, partner at Deloitte India, said, “The significant attrition levels across industries in late 2021 continued until early 2022. We saw Indian organisations budgeting the highest increment in 2022 over the last four years. What they also did was hire aggressively. This led to employee costs rising faster than revenue growth over the last 3–4 years in almost every other company. Stubborn inflation, higher interest rates, and a slowing economy are likely to make organisations more cautious this year. We expect increments and attrition to witness lower trends in 2023.”
The report said as the uncertainty of the future of work continues, it becomes crucial for organisations to deploy a common skills framework to identify gaps in their existing talent capability and fuel a wide range of talent-related decision-making.
“While almost three in every four organisations recognise the value of a common skills framework primarily for learning and development and career progression, approximately 42 percent of organisations do not revise their framework regularly to contextualise it to changing business requirements,” it said.
It also said technology has come to the forefront for businesses in a post-COVID-19 operational context—with hybrid working models becoming more crucial while hiring talent and for employee retention. Currently, 3.8 percent of the total employee cost is budgeted for HR technology enhancements in most organisations.
“The manufacturing and IT sectors emerged as the biggest investors in HR Tech in 2022, with the lion’s share of the tech portfolio being dedicated to cloud-based applications and data analytics tools for enhancing talent management processes,” the report added.
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