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Regular-article-logo Friday, 04 July 2025

SIGNS OF HIRE FREEZE, FAINT HINT OF PAY CUT 

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OUR BUREAU Published 07.02.02, 12:00 AM
Feb. 7 :    Feb. 7:  The annual salary survey by Hewitt Associates has thrown up some sobering statistics as well. Over 27 per cent of the respondents have said they are considering a hiring freeze while 9.6 per cent are unsure; 17.6 per cent are planning layoffs while 10.3 per cent are not sure; and 3.3 per cent are planning salary cuts and 5 per cent are unsure. 'Most of the people planning layoffs and salary cuts belong to the software development segment. However, some of the big players in the software industry are reworking the contractual arrangements with their employees so that they do not have to turf them out altogether,' says Nishchae Suri, head of Hewitt's Measurement Practice for India and West Asia. The job groups that pose the greatest challenge for retaining or attracting talent belonged to information technology and sales and marketing. Ninety-seven per cent of the respondents said they had a performance management system and 84 per cent said they linked salary increases to a performance rating. Some facts were revealing: a typical Indian organisation rates 14.4 per cent of its employees as outstanding, 39.3 per cent as above average, 39.7 per cent as average and 6.6 per cent as below average. 'We are increasingly seeing companies moving away from a uniform pay rise for its employees. The breakthrough year was 2000 when India Inc. forked out large pay rises,' says Ravi Virmani, managing director of Hewitt Associate's South Asia operations. Average pay hikes for outstanding employees will be in the region of 18.4 per cent, with above-average employees getting 14.2 per cent, average staff 10.5 per cent and below-average workers just 3.9 per cent, says the survey. 'India's highly skilled managers are now getting globally competitive salaries and there is no longer a cost advantage for foreign companies in hiring for overseas operations. But the salaries for middle-level managers are low with managers in the West getting two to four times the local compensation levels,' says Virmani. But he added that pay hikes in India and China were better than in the rest of Asia. All this will have a knock-on effect on new hirings as well. The number of companies going in for campus recruitments is down, say Hewitt officials. And top salaries for new hirings this year will be about the same as last year-- which is a new trend that management institutes will have to live with till the business downturn runs its course.    
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