According to TeamLease HRTech CEO Sumit Sabharwal, It is expected that certain sectors will restore salaries to the pre-pandemic mark.
The salary is expected to be restored by the end of this financial year aided by the recovery in economic activities. The companies are trying to work as a pre-pandemic work model only.
Sumit Sabharwal said that while hit by the pandemic, organizations across sectors resorted to paying cuts and layoffs to reduce their labour costs.
According to the CEO Sumit Sabharwal:
- The sectors such as automobiles, hospitality, BPO, ITES, construction, and real estate were the worst affected by the disruptions during the Covid-19. They witnessed layoffs and huge salary cuts of up to 28 percent during the pandemic.
- However, on the other end sectors like tech start-ups, ed-tech, online retail, and logistics have not only remained untouched by the pandemic. Additionally, they even witnessed a boom resulting in a high rate of hiring as well as increments.
- Apart from this large and traditional businesses in sectors such as banking, eCommerce, education, information technology, and telecommunication witnessed an average annual increment in the range of 5-12 percent.
“After analysis of data from our client base, we found that the workers in the formal sector witnessed a 3.6 per cent wage cut while informal workers experienced a much sharper fall at 22.6 per cent. The pandemic has shown us the importance of the format sector in the economy,” he noted.
Sumit Sabharwal said, “As normalcy returned and the economy gradually recovered companies began giving increments that helped in narrowing the salary gap to the 2019 level.”
“However, there is still a little gap of around 7-14 percent from the 2019 wage level in certain sectors. We expect the recovery to reach the 2019 level by the end of this financial year,” he added.
Sumit Sabharwal further said, “Talent retention amid high attrition, recovery in businesses, and easing concerns about Covid-19 disruptions are some of the factors making companies handsomely reward their employees.”
