India Inc is doling out higher increments, some even offering bigger hikes than in 2019

India Inc employers who have their appraisal cycle payouts in the June-August period have given out significantly higher increments to employees in 2021, compared to what they did last year during the first Covid-19 wave.

For most such companies, including the RPG Group, Aditya Birla Group and Raymond, increments have gone back to pre-pandemic levels as the overall economy gathers steam. Some others have given even bigger hikes than in 2019 to make up for missed-out or negligible hikes in 2020.

According to data shared exclusively with ET by professional services firm Aon, around 102 companies following the July-June appraisal cycle have paid out average actual increments of 9.3% in 2021 compared to 6.2% in 2020. Another 21 organisations following the June-May appraisal cycle, who were also surveyed, have paid out average actual hikes of 8.8%, up from 3.3% last year.


HR heads and industry experts said the increased hikes are a function of economic recovery and improved consumer sentiment. “While the second wave was lethal from a health perspective, it didn’t have quite the same impact on business, which is why the bounce-back was sharper. Many companies saw off the second wave and realised it was a longer-term game,” said Roopank Chaudhary, partner at Aon’s human capital business.

For companies that have a mid-year appraisal cycle, increments — where paid out — were given in the middle of the pandemic in 2020, amidst fears and uncertainties regarding its impact on business. Now the rise in pent-up demand, along with the intent of carrying on with business-as-usual, is reflecting in improved hikes. Also, as attrition goes up across sectors, it has become essential to retain talent.

RPG Group did not give any hikes in July 2020 but paid out small increments in January 2021. In July this year, it gave its 2021 increments as per schedule, which were, on an average, 60% higher than that for the last cycle.

“The current hikes are at around pre-pandemic levels. In IT, where demand for talent is more, increments have been even higher,” said S Venkatesh, group president at RPG Enterprises.

At Aditya Birla Group, hikes have varied across group companies but are higher than last year. Compensation is an outcome of many factors, but uncertainty is lesser than last year, its global HR director Santrupt Misra said.