Average increments to drop to 9.1 per cent in 2023 across sectors: Study

Mumbai, March 29

Average increments are likely to drop to 9.1 per cent this year in almost all sectors following inflation, higher interest rates and a slowdown in the economy, according to a study.

The average increment in 2022 was 9.4 per cent, Deloitte India Talent Outlook 2023 stated on Wednesday.

The study found that in 2023 increments are expected to be lower across almost all sectors, compared to 2022 actual increments.

While the Life Sciences sector is expected to witness the highest increments in 2023, the IT sector will likely witness a major drop in increments as compared to last year, the study said.

Additionally, attrition in India reached 19.7 per cent in 2022, up from 19.4 per cent in 2021, it stated.

“The significant attrition levels across industries in late 2021 continued until early 2022. We saw Indian organisations budgeting the highest increment in 2022 over the last four years. What they also did was hire aggressively. This led to employee costs rising faster than revenue growth over the last 3-4 years in almost every other company.

“Stubborn inflation, higher interest rates, and a slowing economy are likely to make organisations more cautious this year. We expect increments and attrition to witness lower trends in 2023,” Deloitte Touche Tohmatsu India LLP (Deloitte India) Partner Anandorup Ghose said.

The Deloitte India Talent Outlook 2023 study is based on a survey in January 2023, done among 300 organisations across seven sectors and 25 sub-sectors.