As the impact of the pandemic wanes and businesses turn their attention to formulating strategies for the future of work, a recent report titled “Future of Work” by EY reveals that approximately 42% of employees are expected to return to full-time office work, while 26% are anticipated to continue with a hybrid work arrangement for an extended period.
The report also highlights that organizations are offering the same pay to employees, whether they work from the office or remotely. Rather than offering disproportionate salary hikes, companies are prioritizing healthy work practices to invest in their employees, manage expenses, and foster a more positive work environment. This approach has the potential to cultivate a more engaged, productive, and committed workforce over the long term, as per the report.
With many organizations are adopting flexible working models, employers are now more focused on incorporating wellness programs as part of their benefits framework. According to the study, emotional and physical wellness are the prime focus for employers, followed by financial and social wellness
Projected salary hikes in India
According to the EY report, the average salaries in India are expected to increase by 10.2% in 2023, slightly lower than the actual 10.4% increase in FY’22, but still in double digits. The projected salary increases for 2023 are lower than the actual increases for 2022 across all job levels except for blue-collar workers, who are expected to see a slightly larger decrease in compensation in 2023. The top three sectors with the highest forecasted salary increases are e-commerce at 12.5%, professional services at 11.9%, and information technology at 10.8%, all tied to technology.
Sectors looking to hire in 2023
The report also identifies several emerging sectors that are anticipated to keep growing and provide a wide range of employment options for qualified employees. These sectors include renewable energy, e-commerce, digital services, healthcare, telecommunications, educational services, retail and logistics, and financial technology.
Towards the end of 2022, the attrition rate in India has shown signs of easing from the 2021 level. According to the EY study, a complex interplay of various factors influenced the attrition trends in India in 2022. It included factors such as the state of the economy, job opportunities, and the focus on employee engagement and retention by organizations. The ecommerce, technology, financial institutions and professional services sectors are experiencing attrition rates exceeding 20%, which positions them among the top sectors in terms of attrition.
Top skills in demand
Technology skills such as those in AI, ML, and cloud computing are in high demand and command a premium of 15% to 20% over basic software engineering compensation levels. Analytical skills such as risk modelling, data architecture, and business analytics command a premium of 20% to 25%. 48% of organizations offer a premium for high-demand skills, with an average premium of up to 1.9 times for such skills as compared to basic skills. Furthermore, pay hikes offered to high-performing talent operate at a ratio of 1:1.8 as an average across sectors.
The gig economy had an estimated 7.6 million workers (76 lakh) in 2020-21, and it is expected to grow to 24 million workers (2.4 crore) by 2029-30. This type of work offers workers flexibility in scheduling and structuring their days, which can enhance their work-life balance. Gig jobs are becoming increasingly popular, especially among tech-savvy Millennials, due to the proliferation of freelancing apps and a rising job crisis. However, despite the growth of the gig economy, only 38% of employers anticipate significant growth of gig workers in their organizations in the next two to three years.