Several organisations across India have decided to postpone their increment process and the budget dedicated for promotion cycles has been reduced, according to the latest report by KPMG. The increment cycle is expected to worsen if the coronavirus situation persists.
Voluntary retirement and reduction of pay for employees are among the measures that corporates are taking to protect themselves from the slowdown caused by the pandemic, as per the report.
As many as 50 per cent of the companies have deferred or suspended their promotion schedule. The report reveals the middle and senior managers are most-affected with half of the organisations deferring or suspending promotions for these levels.
A downward trend is seen in promotion numbers and budgets, according to the data shared by KPMG. While 33 per cent of organisations admitted to having reduced their promotion numbers, further 36 per cent have lowered increment budgets.
If COVID-19 situation persists, around 22 per cent of the organisations will defer, freeze, or suspend incentive payouts to support their overall finances, states the survey. A few organisations are also exploring the option of offering Voluntary Retirement Service (VRS) to employees.
Hiring too has slowed down. Nearly 66 per cent of organisations have deferred or suspended their hiring schedule at different job levels, while 30 per cent have also reduced their headcount budgets. Those already enrolled will have to bear the brunt as 30 per cent of organisations across sectors reported a downward revision of fixed pay at middle and senior management levels.
Creativity is the key to success in the future and currently, HR teams across firms are looking for innovative ways to engage with their employees on wellness programmes. A majority of the organisations re-defined their communication strategy to increase engagement of employees, virtual team meetings and briefing for employees by the leadership being the top two leading engagement practices. Additionally, a few companies have enabled AI-enabled pulse surveys to capture well-being of employees regularly, states the report. The current crisis is pushing the majority of corporates to take the leap and switch to e-webinars (27 per cent) and ‘e-learning’ (26 per cent).