62% Indian Employees Receive Salary Hikes Despite a Lukewarm Market

foundit (previously Monster APAC & ME), India's leading talent platform, today published findings from a comprehensive survey analyzing appraisal trends for Indian employees over the financial year 2022-2023. The "foundit Appraisal Trends Report", based on insightful data from employees across various experience levels and industries, reveals that 62% employees received a salary hike this year despite the uncertainties and cautious sentiments observed in the job market today.

Commenting on the findings of the report, Sekhar Garisa, CEO, foundit (previously Monster APAC & ME) said, “A majority of Indian employees have secured a positive appraisal this year despite cautious sentiments exhibited by businesses today. The foundit Appraisal Trends Report reveals that companies are also looking at additional and alternative variables to salary hikes, such as ESOPs, bonuses, and even promotions. It is heartening that white-collar employees in non-metro cities have also secured encouraging pay hikes. Today, several factors, such as workplace culture, skilling opportunities, and team-leading opportunities, highly influence employee morale. And, the role of leadership and HR team to ensure these cannot be emphasized enough.”

City-wise analysis indicates that 13% professionals in non-metro cities received an outstanding hike exceeding 20% as compared to metro cities where the share of professionals who received the same increment was slightly lower at 11%. These findings underscore the growing opportunities and rewards offered to talent in non-metro areas as more and more organizations move out of urban spaces to save costs and improve access to a larger talent pool.

Associate level professionals receive highest hikes this year, while over half of entry-level employees receive no appraisal

As per the report, the appraisal distribution across different experience levels paints a diverse picture this year. Salary hikes for Entry-level professionals (0-3 years experience) reflected an interesting trend, with 62% of total respondents claiming that they did not receive any appraisal this year. 10% of them received a 5-10% hike, while 9% secured a 0-5% salary raise.

Associate (4-6 years) level employees fared slightly better with 17% having secured a 5-10% hike, and 15% a 10-15% raise. Moving up the ladder, 23% of Mid-senior (7-10 years) level employees received an increment in the 5-10% range, while Leadership (+16 years) positions emerged as the top beneficiaries, with an impressive 19% receiving increments in the 5-10% range.

However, the survey's most surprising revelation was that Intermediate employees stood out as the top beneficiaries in terms of the maximum appraisal percentage, with 13% of them receiving a hike exceeding 20% surpassing even the senior level and leadership positions. It is also notable that over 30% of employees in each experience level category did not receive any appraisals this year.

Healthcare and BPO/ITES sectors offer salary hikes to over 90% of employees

The report reveals that a majority of employees in Healthcare and BPO/ITES industries secured a salary hike this year. Within healthcare, 29% employees got a 5-10% hike while 27% employees got a 10-15% hike. In the BPO/ITES industry, close to half of respondents, i.e. 49% employees secured a 0-5% appraisal in FY23, whereas 26% got a 5-10% raise.

The BFSI industry has rolled out good appraisals this year, with 20% employees receiving a 10-15% hike, and 30% a 5-10% increment. The banking sector has been improving its performance across key metrics, with credit growth estimated at ~15% over fiscal 2023 and 2024. IT showcased a similar trend, with 30% getting a 10-15% hike and 21% a 5-10% appraisal. It is interesting to note that 82% respondents employed in IT secured a pay raise this year. Moreover, 20% of respondents employed in the Engineering/Construction industry secured a salary hike exceeding 20%.

76% of employees willing to consider job change based on current appraisal survey

A remarkable 76% of employees expressed their openness to considering a job change based on the survey results for the fiscal year 2022-2023. Among those willing to explore new opportunities, a notable 26% of respondents stood out as they fell within the 5-10% increment range, marking the highest percentage in this particular category.

However, it is heartening to note that the majority of the employees who are keen to stay in their current roles after appraisals attribute the same to team leading opportunities, good office culture and better learning opportunities. Interestingly, the survey reveals that individuals still prioritize work model flexibility as an important factor when considering a job change.

49% of employees who did not receive salary hikes compensated with ESOPs & bonuses

Among other notable findings, a significant 49% of employees who did not receive appraisals were incentivized with Employee Stock Ownership Plans (ESOPs) and bonuses by their employers, which are alternative forms of recognition and rewards. Moreover, 20% of those without hikes were offered promotions indicating that career growth opportunities are being offered independently of immediate financial rewards.

Reflecting overall employee sentiments on appraisals, 38% of respondents stated that the increment they received this year met their expectations, reflecting a positive alignment between performance and recognition. The appraisal process was deemed fair by 52% of respondents, indicating transparency and fairness in the evaluation process.