Saturday, April 1, 2023

40% India Employees Witnessed Reduction in Pay Due to COVID Pandemic: Survey

40% India Employees Witnessed Reduction in Pay Due to COVID Pandemic: Survey

As the COVID-19 pandemic continues to impact the job market, a survey has shown that 40 percent of the employees in the country witnessed a reduction in their pay.

The ‘Human Capital Survey’ was conducted by Grant Thornton among 16,700 respondents across sectors, including consumer, retail, e-commerce, financial services, manufacturing, automotive, pharmaceuticals, and healthcare, among others.

While the total pay decreased for 40 percent of respondents, a temporary reduction in fixed pay was experienced only by 16 percent of employees, according to the survey.

However, the survey said there was a trend of decrease in the variable pay or performance pay component with over 31 percent of employees receiving no variable pay, 33 percent experiencing a decrease in variable pay.

Grant Thornton Bharat Partner (Human Capital Consulting) Amit Jaiswal said, “While one-third of the respondents experienced a reduction of over 20 percent in their fixed pay, 40 percent did not see any change in fixed pay despite an overall decrease in their earnings. This highlighted that the variable pay component of the salary took a major hit.”

Over half of the respondents said that if given the option, they would opt for a higher fixed salary even if their overall pay was reduced.

“There is an increased expectation to change the current pay mix and reduce the pay-at-risk part of the compensation, specifically in the younger workforce of mid-size organizations,” said Jaiswal.

Despite 42 percent of organizations reviewing their strategy, operating structure, and performance evaluation framework post-COVID-19, more than 50 percent of respondents said their organizations experienced higher attrition among high-performing employees, compared with the pre-pandemic levels.

Grant Thornton Bharat Director (Human Capital Consulting) Ritika Mathur said, “Almost half of the respondents said the actions taken by their employers met their additional needs. However, 49 percent feel that there is a need for action from employers to meet their expectations.”

The survey further showed that most respondents want benefits, including work from anywhere, insurance, home office allowance, and flexible hours.

Over 73 percent of the survey respondents said organizations must introduce long-term incentives, such as employee stock ownership plans (ESOPs) and retention bonuses.

It showed that work from anywhere, life or medical insurance, home office set-up, and flexible hours are also being sought as high-priority benefits.

“There are two big trends clearly emerging from the survey. First, an increased appetite for long-term incentives, especially from the younger workforce. Second, the definition of benefits. It is no longer restricted to medical insurance,” Jaiswal said.