Average increment for the current fiscal (FY18) is likely to be 9.7 per cent, a decrease of 0.6 per cent from 2016-17. This is mainly because the markets have not done well last year, low salary budget, cost-cutting within companies and higher pay packets," according to the KPMG Annual Compensation Trends Survey 2017-18.
However, the average projected variable pay across sectors is expected to be 15.4 per cent, which is 0.4 per cent higher than that in FY17, it said.
The highest increment of 12.5 per cent is reported by the e-commerce sector, the lowest of 8.1 per cent is that of logistics, the survey said.
The decline was seen most in the banking and financial services sector, where financial services sector has decreased the increment from 9.7 per cent to 8.1 per cent, it added.
The KPMG survey analyses and brings together findings from 263 companies across 19 sectors such as automotive and auto components, banking and financial services, consumer goods, energy, engineering and manufacturing, infrastructure, construction and real estate, IT & ITeS, life sciences and healthcare, logistics, media & advertising and retail.
On attrition, the report said, the highest voluntary resignation of 20.4 per cent is reported by e-commerce, while the lowest of 8.1 per cent being reported by energy sector.
It said the top reasons for attrition are better pay elsewhere (28.1 per cent), better career opportunity (23.4 per cent) and personal reasons such as marriage, health among others (19.6 per cent).
Performance-based variable pay (19.7 per cent), Recognition awards (13.1 per cent) and retention bonus (11.8 per cent) are considered the top compensation levers for talent retention.
And for attracting talents the top reasons are benefits offerings (26.3 per cent), guaranteed incentives (19.4 per cent) and awards (16.6 per cent), it added.
“With the new generation of employees looking for greater control, involvement in key decisions and a culture of feedback and regular conversations, organisations realise that they need to re-think the way they nurture and manage talent and performance. New Human Resource initiatives are being implemented and organisations are testing waters to create an optimal performance management model," KPMG India Partner and Head, People and Change Advisory Services, Vishalli Dongrie said.
