Numerous organizations throughout India have opted to delay their annual salary increment processes, and there has been a reduction in the budget allocated for promotion cycles, as indicated by the most recent report from KPMG. The trajectory of the increment cycle is expected to worsen if the ongoing coronavirus situation persists.
To shield themselves from the economic slowdown induced by the pandemic, companies are implementing measures such as voluntary retirement and pay cuts for employees, according to the report.
The report discloses that 50 percent of companies have either deferred or suspended their promotion schedules. Notably, middle and senior managers are significantly affected, with half of the organizations postponing or suspending promotions at these levels. KPMG’s data highlights a declining trend in both promotion numbers and budgets. While 33 percent of organizations have reduced their promotion numbers, an additional 36 percent have cut down on increment budgets.
Should the COVID-19 situation persist, around 22 percent of organizations are prepared to defer, freeze, or suspend incentive payouts to bolster their overall financial stability, according to the survey. Some organizations are also contemplating offering Voluntary Retirement Service (VRS) to employees.
The hiring landscape has also slowed down, with nearly 66 percent of organizations deferring or suspending hiring at various job levels. Additionally, 30 percent have decreased their headcount budgets. Those already employed will feel the impact, as 30 percent of organizations across sectors report a downward revision of fixed pay at middle and senior management levels.
Recognizing the need for innovation, HR teams are actively seeking creative ways to engage employees in wellness programs. Many organizations have redefined their communication strategies to enhance employee engagement, with virtual team meetings and leadership briefings ranking as the top two practices. Moreover, some companies have implemented AI-enabled pulse surveys to regularly assess employee well-being.
In response to the current crisis, a majority of corporations are transitioning to e-webinars (27 percent) and ‘e-learning’ (26 percent) as part of their strategies for the future.
