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Home >News >India >Variable pay cut in pandemic year, employees seek hike in fixed pay: Report

NEW DELHI: Around two-third of employees either did not get any variable pay or were given a reduced variable pay in the past year, as India Inc cut down their staff cost in a pandemic year.

While 31% employees received no variable pay, 33% saw a decrease in the percentage of variable pay received by them, said a survey by consulting firm Grant Thorton Bharat.

According to the 'Human Capital Survey, on the Impact of Covid-19 on Compensation and What do the Employees Want', the loss of variable pay is pushing a sizable portion of employees to demand a restructuring of the salary with a higher fixed pay even if that reduces the overall CTC.

Respondents said as working from home is the new normal, employers should consider a work-from-home allowance to reduce their employees’ office-related expenses.

It also showed that companies experienced higher attrition among young performers, while lower or stable attrition among mid to senior-level performers.

Overall, 40% employees witnessed a reduction in total pay, and 45% did not see any change in overall pay over the past year.

The impact on remuneration was more pronounced in mid-size companies with less than 1000 employees in sectors like real estate, infrastructure and hospitality. Larger companies in consumer-led sectors, such as consumer, retail and e-commerce, pharma, healthcare and life sciences, showed higher resilience to the adversities.

“While one-third of the respondents experienced a reduction of more than 20% in their fixed pay, 40% did not see any change in fixed pay despite an overall decrease in their earnings. This highlighted that the variable pay component of the salary took a major hit," said Amit Jaiswal, partner, Human Capital Consulting at Grant Thornton Bharat.

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