E-commerce sector reports highest salary hikes at 12.5%: KPMG survey
E-commerce sector also reported the highest voluntary attrition rate of 20.4% while the logistics sector saw the lowest salary hike at 8.1% this year, says KPMG survey
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Mumbai: Employees in the e-commerce sector are clear winners this appraisal season, according to a survey by consulting firm KPMG.
The sector reported the highest salary increment at 12.5% and the highest voluntary attrition rate of 20.4%, revealed the KPMG Annual Compensation Trends Survey released on Monday.
The e-commerce sector is reorganising its top talent amid rapid change, a funding slowdown and consolidation. Over the next two to three quarters, the sector’s leadership focus will turn towards ways of better connecting with customers, said Venkat Shastry, partner in charge at Heidrick & Struggles, an executive search firm.
“High retention and investment of top dollar in acquiring such leaders relevant to the new operating context will be key trends to watch for,” Shastry added.
According to the report, at 8.1%, the logistics sector saw the lowest increment this year. The maximum decrease is projected by the banking and financial services sector, where the increment has fallen from 9.7% to 8.1%. The financial services sector also reported the highest variable pay of 20.7%.
“This indicates that organisations are continuing to move towards paying for performance and variable pay holding a higher percentage in the cost-to-company,” the report said.
While the average projected increment has seen a slight dip, the average projected variable pay across sectors has improved marginally compared to last year.
The average projected increment for the year 2017-18 is 9.7%, a decrease of 0.6% from 2016-17 while the average projected variable pay across sectors is 15.4%, which is 0.4% higher than that in 2016-17, the survey showed.
Nearly 77% of respondents said they identify high potential employees and offer them an average hike of 14.7% while 12% respondents reported giving an off-cycle salary hike, according to the survey conducted among 263 companies across 19 sectors including automotive and auto components, banking and financial services, consumer goods, energy, engineering and manufacturing, infrastructure, construction and real estate, information technology (IT) and IT-enabled services.
Among top critical future HR trends cited by respondents were gamification (24%), robotics and cognitive automation (37%) and emergence of the gig economy (24.5%).
The survey found top three compensation levers for attracting talent were benefit offerings (26.3%), guaranteed incentives/variable pay (19.4%) and referral benefits/awards (16.6%). The top three compensation levers for talent retention were identified as performance-based variable pay (19.7%), recognition awards (13.1%) and retention bonus (11.8%).
The survey identified three top reasons for attrition across sectors—better pay elsewhere (28.1%), better career opportunities (23.4%) and personal reasons including marriage and health (19.6%).