Home / Companies / News /  India Inc dangles off-cycle promotions in bid to retain employees
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MUMBAI : At a time of talent shortage and tighter margins, several companies are giving off-cycle promotions to eligible employees as they attempt to hold on to experienced staffers.

Several companies have introduced quarterly and mid-year promotions and sometimes upgrade employees if a new role opens up, especially for key middle and senior management executives.

“Unlike the past, the velocity of change is much faster in industry dynamics than ever before, and learning curves are becoming faster and shorter. We now have a rolling calendar, and deserving employees do not have to wait until a year to be promoted if a role is available," said S. Venkatesh, group president of human resources at RPG Enterprises.

“Group companies follow a quarterly promotion review cycle, and a promotion can be awarded throughout the year as and when positions are available," he added.

Changes in the promotion cycle follow several quarters of aggressive hiring where candidates were offered salary corrections, counter-offers and increments, which often doubled their salaries. However, with rising margin pressures, companies are handing out promotions to high performers rather than giving blanket pay hikes.

Wipro Ltd has done away with annual promotions and, from this year, will offer quarterly promotions to its employees, which also come with a marginal hike. This, along with the regular increment, would mean employees see their salaries increase more than their peers. “Wipro will roll out several promotions for its employees, starting July. The company has decided to offer quarterly promotions to top performers up to the mid-management level," the company had said earlier.

For some companies, this step may also help in lifting internal talent towards senior roles than banking on external hires.

Cereal maker Kellogg, for instance, has promotions all year round, where employees can be moved up the ladder.

“It is not as though it only happens annually as people move into roles at the next grade level across the year. Promotion happens across the year as roles open up," said Nimisha Das, director of HR, Kellogg South Asia.

At the packaged food company, the aim is to make internal talent move up when a vacancy opens up rather than go external. “We call that our build index, saying how do we build an organization from within. We are at 60%, which means out of all the roles which opened up last year, 60% was filled internally," Das said. However, such promotions could be a short-term measure, or they may lead to disparity within the firm and skew internal equations.

“Promotions through the year will impact internal equity vis-a-vis other employees and give rise to a culture of ‘my way or the highway’. Even if employees threaten to leave, firms need to listen to what they have to say," said S.V. Nathan, partner and chief talent officer at Deloitte India.

Nathan said that discussion on career progressions might work out because promotions “need to come with a change in responsibility; otherwise, it doesn’t make any difference to the career of that individual".

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