Indian professionals are split between making peace with pay cuts and demanding pay raises in this year of crisis.
Some experts say the lack of increments is not a big issue as people are saving money on commutes as they work from home, and spending on eateries, cinema halls, and shopping malls have been cut. However, some argue that employees are having to spend on electricity, wifi, and other resources at home with no additional compensation. Moreover, the burden of house chores and parenting weights heavy for many—especially women.
Luckily for some, certain jobs are Covid-proof, which means that they are still well in demand and employers are happy to hand out handsome compensations for them. Highly-skilled professionals across sectors have a leg up when employers cherry-pick roles to reward.
“While businesses will stay conservative with salary increments, they have not shied away from rewarding specialised skills,” said Rituparna Chakraborty, co-founder and executive vice president of TeamLease Services. “Filling one’s armoury with skills that will help in driving outcomes either through up-skilling or re-skilling is the way forward for talent to stay in demand and to command the desired compensation.”
In the early months, companies expected coronavirus to deal a massive blow to business. As early as April, a survey noted that over half of India’s startups had either announced salary cuts or were debating such a move. In May, Mukesh Ambani-led Reliance Industries announced pay cuts and deferred bonuses for its hydrocarbon business. Many other firms big and small followed suit.
With millions of jobs across sectors on the line since the pandemic broke out, expecting a raise in 2020 is “an expectation beyond your normal capacity of life,” said N Shivakumar, managing director at consultancy ResourceTree.
Even during the 2008 recession, employees took salary cuts of up to 40%, he said, adding “there is a higher level of maturity with employees across all levels today. They understand the pandemic taken a toll on businesses. Only if an employer survives can employees survive.”
One of the sectors still struggling is real estate because, with infrastructure, there are big payouts, capex is high. It’s the most laggard off them all, said Sanchit Vir Gogia, founder and CEO of Greyhound Research.
However, it’s not all doom and gloom. In HR consultancy TeamLease’s July report, six out of the 17 sectors surveyed offered more than 10% salary growth in the year ending June 30, 2020. Some of these industries are in fact benefitting from the new normal of working from home, the report suggests. Where companies have stepped up their automation game or fostered social connectivity and collaboration online, productivity has grown.
“Insurance is not talked about a lot but the sector has launched a lot of new products to suit the Covid-environment on the consumer and enterprise side,” said Gogia.
Ray of hope
Already, online grocery delivery found many takers and ed-tech boomed on the back of schools being shut. Now, India’s economy is slowly returning to normal. There’s pent-up demand for white goods, automobiles, and even (domestic) travel.
Consequently, some employers have walked back their decisions to cut salaries.
For instance, upGrad, which had announced pay cuts for its employees up to 30% basis level of seniority, revoked all salary cuts and reimbursed 100% of the deducted amount to all employees in their July salary since the pandemic turned out to be a massive fillip for the business.
In May, expecting the number of restaurants on its platform to shrink by 25-40% over the next 6-12 months, Zomato’s founder and CEO Deepinder Goyal announced salary cuts of up to 50%. But two months on, with 60% of business back to normal, Zomato reinstated all salaries.
Scores of businesses are on the same track: E-commerce player Snapdeal reinstated salaries and even rolled out bonuses. Gurgaon-based e-grocer Grofers reinstated salaries after the business did better than expected. Starting Aug. 1, hotels group Oyo did the same.
What’s more is, going forward, companies may realign pay structures to give allowances for wifi, furniture, and gadget allowances.
More bright spots
While having a job in the midst of massive layoffs and retaining salaries is a win in itself in a year of crisis, certain players are going above and beyond.
At personal hygiene firm Pee Safe, there have been no salary cuts, and the company has even doled out increments. “We wanted to extend our support to our employees for this difficult time and reward them for their hard work despite working remotely,” founder Vikas Bagaria said.
Companies have found other ways to cope with financial distress. Rental car service Zoomcar announced zero layoffs and zero pay cuts despite the pandemic having an “unprecedented impact” on the business, co-founder and CEO Greg Moran told Quartz. Instead, the company deferred 50% of the salary of senior leaders (VP and above) until June, after which all employees including the senior leadership have received full pay. The firm says it has given increments as well.
In July, clean energy firm RenewPower gave between 5% and 12% raises to its 1,100-strong workforce, and annual performance-linked bonuses, too. Several automobile behemoths like Hyundai Motors and MG Motor decided to go ahead with salary increments in the same month. Asian Paints gave out appraisals to boost employee morale. Fintech platform BharatPe, too, announced hikes.