Average India Increment Expected To Be 9% In 2024
As India Inc. continues to grow, its workforce becomes more diverse and gets younger every year. HR leaders' top priority remains striking a balance between delivering value to stakeholders and managing the aspirations of this dynamic workforce. According to Deloitte India Talent Outlook 2024, the average India increment is expected to be 9.0 per cent in 2024 compared with 9.2 per cent in 2023. One in every three organisations is planning to give double-digit increments in 2024. While lower than last year, increment projections for 2024 are higher than pre-covid levels across all sectors except IT and BPOs/KPOs.
The survey also predicts that companies are likely to offer double-digit increments to junior management employees but with a high focus on performance-based differentiation. Organisations may be stricter with their bell curves, making it harder to secure top ratings. However, top performers can still expect 1.8x the increments given to average-rated employees. Also, for employees rated below average, the increment is expected to be lower than last year — 0.6x in 2023 versus 0.4x in 2024.
The percentage of employees expected to be promoted decreased from 12.3 per cent in 2023 to 11.5 percent in 2024. Organisations are likely to maintain a 7.5 per cent increment for promotions to retain key talent. Regarding performance bonuses, one of every two companies could pay at-target or above-target bonuses in 2024. Attrition rate fell from 20.2 per cent in 2022 to 18.1 per cent in 2023 due to the slow hiring momentum.
Anandorup Ghose, Partner, CHRO Programme Leader, Deloitte India said, “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. On a global scale, India continues to be the fastest-growing major economy and could witness the highest increment compared with other geographies.”
Learning and development
Organisations are moving towards a scientific approach to upskilling their workforce using a common skills framework to identify gaps in their talent capability. While almost three in every four organisations today have a skills framework, almost a quarter of them cannot update it regularly to match their evolving business needs. Although CXOs have better visibility of skill demand and supply across jobs, only 30 per cent companies track and maintain this compared with 19 per cent past year. Most organisations prioritise usage and cost efficiency over directly linking learning interventions to financial improvement.
Technology-enabled HR
The technology adoption in HR has also led to increased data-backed decision-making. Most organisations apply analytics to manage their Human Capital. However, HR analytics focuses on descriptive and diagnostic analysis in India rather than being predictive and prescriptive for most companies. The use of HR analytics is highest in variables such as attrition, workforce planning, and employee engagement. Indian organisations are also taking measured strides towards adopting AI in Human Capital management. About 25 per cent organisations use or plan to use AI for talent acquisition, employee engagement, and chatbots for query resolutions. A few leading organisations are also using AI for performance management.
