Average India increments are expected to go down from 9.4 per cent in 2022 to 9.1 per cent in 2023 across almost all sectors. While the Life Sciences sector will likely witness the highest increments in 2023, the IT sector may report a massive drop in increments compared to 2022. Additionally, attrition in India went up from 19.4 per cent in 2021 to 19.7 per cent in 2022, according to Deloitte India Talent Outlook 2023.
Commenting on the trend, Deloitte India Partner Anandorup Ghose said that while Indian companies budgeted the highest increment in 2022 over the last four years, they also hired aggressively. Ghose noted, “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.”
He further explained that due to this, employee costs shot up at a faster speed than revenue growth over the last 3-4 years in every other company. Ghose underlined, “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.”
Moreover, around 42 per cent of organisations do not revisit their frameworks regularly to adapt to changing business needs. Only 19 per cent of the organisations surveyed had employees with skills beyond their current roles. These companies mostly belonged to the IT, ITes, and consumer sectors. The Deloitte India Talent Outlook 2023 further stated that 80 per cent of organisations had leadership teams that lacked structured data or reporting mechanisms to understand current skill capital.