As a recognition of employee efforts, a few companies are offering salary hikes and promotions even as the country is under a lockdown since March 25, following the Coronavirus outbreak.
Companies like Capgemini, Future Generali India Insurance, ICICI Bank, ReNew Power, Renault, among others, have rolled out salary hikes to ensure that employee morale is boosted and that these staff members do not face any financial hardship owing to the lockdown.
At ICICI Bank, almost 80,000 staff members across branches are being offered up to an 8 percent salary hike. It is applicable till the M1 grade of managers. In a communication to the staff members, the bank said that the hikes are being offered to frontline staff members who have been ‘Corona Warriors’. The bank did not respond to a query sent by Moneycontrol.
At digital payments solution and automation technology firm AGS Transact Technologies, field workers and staff worked even during the lockdown.
Partha Samai, Group Head, Human Assets, AGS Transact Technologies, told Moneycontrol that the field staff, led by the senior management, played a crucial role in the seamless execution of this contingency plan which eventually helped us achieve business continuity across sectors. There were no salary cuts across the board.
He explained that the field staff, including cash custodians, service engineers, and drivers regularly reported at the workplace throughout the lockdown days. Others like tech, IT, admin and customer support teams worked from home.
To recognise their work, Samai said that eligible employees were given increments and promotions. The field staff who reported at the workplace was also incentivised.
Even traditional companies like those in the information technology sector have taken a lead. IT services firm Capgemini announced a salary hike for almost 70 percent of its staff in India from April 1 itself. About 84,000 employees benefited.
For the rest of the employees, too, salary hikes and promotions have been offered with effect from July 1. Capgemini did not respond to a query by Moneycontrol. Capgemini is also laying off bench employees in India. According to the company, the move was based on performance-linked reviews.
Financial sector firms are among those who were part of essential services even during lockdown. So, their employees haven’t faced as much of a challenge as others.
Here, the general insurance sector has seen a positive growth on the back of a spike in demand for health policies during COVID-19. In July 2020, Future Generali India Insurance, the non-life insurance arm of the JV between retail giant Future Group and global insurer Generali, announced promotions, annual increments and variable pay-outs to all employees.
Anup Rau, MD & CEO, Future Generali, said that the company made sure that every single employee, right from the CXOs to housekeeping staff, got their due credit and bonuses and increments on time.
“I do not believe one can be a customer-centric company without being employee-centric; they are both congruent. Now, more than ever, our employees and partners need certainty and stability in their lives,” he added.
Car maker Renault India is among the companies that is offering the maximum hike. A report said that it will be offering up to 15 percent hike to over 250 employees.
Will this pave the way for hikes across India Inc?
Human resource experts are of the view that the hikes and promotions will continue to be selective and sector-specific. Aditya Narayan Mishra, CEO, CIEL HR Services, said that some companies that have seen lesser impact will strengthen employer brand by giving out hikes right now.
"These companies represent a small minority right now. More companies may join the bandwagon during the festive season, from the third quarter beginning October 2020, depending on the COVID situation," he added.
Most companies which have offered hikes have done so with effect from July 1. There is an industry expectation that due to the pent-up demand from customers, sales during the festive season (Q3FY21) could boost revenues across companies.
According to HR officials, increase in sales between October and December could encourage more firms to offer increments. Rituparna Chakraborty, co-founder and executive vice-president, TeamLease Services, told Moneycontrol that the hike decisions are sector-specific and it is only being seen in sectors where some demand has picked up.
“The first step would be to reinstate previous salaries (pre-cut). Once demand shapes up, increments come next. There are some job roles that are not hit by COVID-19. Those companies will be willing to give hikes,” said Chakraborty.
Edtech company upGrad, which had announced up to 30 percent salary cut (based on seniority) for its employees in April, rolled back its decision in July. All deducted salary will be given back with the July salary, making it one of the first companies in India to do so.
When it comes to India Inc, Chakraborty said that this trend of hikes and promotions cannot be generalised.
“Capital does not pay salaries, customers do. When customers start paying revenues or spending is when you will start seeing it reflecting in companies in the form of salary hikes and promotions,” she added.
Moneycontrol had reported earlier that FY21 would be the worst year for employees as far as salary hikes and promotions are concerned.
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