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Compensation Trends Survey 2012

Deloitte

Human Capital Advisory Services

April 2012

© 2012 Deloitte Touche Tohmatsu India Private Limited 2

Contents

Survey Highlights

Survey Details

Overall Industry Analysis

Detailed Sectoral Analysis

Participant List


The Compensation

Trends Study is an

Annual Study,

conducted by

Deloitte Human

Capital Advisory

Services, of the

Indian Market on

areas that need

benchmark

information. This is

the second year this

study is being

conducted in India

Elements detailed in the Compensation Trends

Survey 2012 - 13

• Salary Increase for 2012 – 2013

• Variable Pay given / to be given for 2012 - 2013

• Attrition rate and key reasons for attrition faced by organizations

• Key Human Resource Challenges faced by organizations

• Cost optimization measures undertaken by organizations

Survey Details

Scope of the Survey


2012 – 13

Compensation

Trends Survey

Report

The data

received was

collated and

analyzed to get

detailed

insights on

sector wise

practices and

compensation

trends

The response

received from

all participants

was validated

and checked

for accuracy

and intended

interpretation

A formal

invitation e-mail

was sent to the

Human

Resources in

the chosen

organizations

requesting for

participation

The

parameters of

the study were

finalized and a

structured

questionnaire

was designed

to be used as

a primary data

collection tool

Design the survey

instrument

The sectors

covered in the

study were

finalized along

with the leading

organizations

from each

sector

Finalization of Target Basket

Invite and seek consent for participation

Data Collection & Validation

Analysis

Survey Details

Survey Methodology


Industry-wise participation

142 organizations participated in the Compensation Trends Survey for 2012 – 2013

Survey Details

Participant Profile

8.5%

4.4%

23.2%

7.0%

4.9% 9.2%

19.0%

5.6%

10.6%

7.4% Consumer Business & Retail

Energy & Resources

Financial Services

Information Technology

Information TechnologyEnabled Services

Infrastructure & Real Estate

Manufacturing

Media & Advertising

Pharmaceuticals, HealthCare &LifeSciences

Other(s)


• Majority of the organizations (~75%) who participated in the survey have employees between 500 – 5000

Highest employee strength was observed in the Manufacturing sector (26%) and Financial Services (18%)

• Gross revenue of majority of the organizations (~50%) is over `1000 crores

Majority of the large revenue generating organizations were in the Manufacturing sector (36%) and Financial

Services sector (18%)

40.2%

34.1%

13.4%

12.2%

500 - 2000 2000 - 5000 5000 - 10000 10000 - 25000

24.2%

9.9%

17.6%

48.4%

100 - 300 Cr. 300 - 500 Cr. 500-1000 Cr. > 1000 Cr.

Gross Revenue Employee Strength

Survey Details

Participant Profile

Undisclosed participants: 16 Undisclosed participants: 36


Contents

Survey Highlights

Survey Details



Participant List


• Overall median salary increase across sectors is 12%

• Manufacturing and Infrastructure & Real Estate sector have reported highest increment figures for 2012 – 2013

at 15%

• Financial Services sector has been most conservative in increment projection for 2012 – 2013 at 10%

• Overall Variable Pay (as a % of CTC) across sectors is 16 %. The frequency of payout is annual for the

majority of companies. However for sales staff, the payout is observed to be monthly or quarterly, depending

on organization compensation policy

• Sectors which have registered highest attrition are „ITeS‟, „Pharmaceuticals, Healthcare & Life Sciences‟ and

„Media & Advertising‟ and the sectors which have registered lowest attrition are „Manufacturing‟ and „Energy &

Resources‟

• The overall attrition across industries is 13%. Better Pay and Personal Reasons have been rated as the key

reasons for attrition industry-wide

• Hiring and Retaining skilled talent continues to remain a key challenge in the market

• Organizations are also keenly adopting cost optimization measures. „Offshoring / Outsourcing‟ of activities has

been rated highest amongst measures adopted. Interestingly employers are not keen on reducing spend on

„Recognition Programs' or „Training programs‟

Survey Highlights

Executive Summary


Contents

Survey Highlights

Survey Details



Participant List


• The Indian economy faced twin macroeconomic challenges of managing growth and containing inflation during the

fiscal 2011-12 against a backdrop of an uncertain global environment

• In response to global economic issues such as Eurozone crisis and rising commodity prices, fiscal year 2011 -

2012 saw the Indian economy slow down

• Policymakers struggled to strike a balance between inflation and growth. Domestic growth rate was impacted by

tightening of the monetary policy by RBI and geopolitical concerns

• India has strong growth fundamentals but faces challenges in the form of a volatile global market coupled with

issues of fiscal consolidation and inflation. Upside risks to inflation expected from fiscal slippage, currency

depreciation and commodity shocks

• The budget pegged Gross Domestic Product (GDP) for the year 2011-12 to have grown at 6.9% primarily due to

deceleration in industrial growth. The estimated GDP growth in 2012-13 is at 7.6%

• The Wholesale Price Index (WPI) inflation for all commodities for the period of March 2011 to January 2012

moderated to 6.6 per cent**

• Inflation in Consumer Price Index for Industrial Workers (CPI-IW) was 5.32 per cent in January 2012**

• A slowing global economy continues to have an impact on the Indian Economy. According to the RBI, the world

economy may observe a decline in its growth trajectory although it is not slated for another recession

Source: ** Economic Survey 2011 – 2012

Deloitte Budget Publication


Market Overview


• Annual median increment for 2012 – 2013 across all sectors is 12%

• Manufacturing and Infrastructure sector has the highest increment figures at 15% and Financial Services sector

has the lowest increment figure at 10%

• Financial services sector maintains a conservative estimate given the overall mood of the economy

• Manufacturing and Energy & Resources have marginally higher increments as compared to last year

• „Infrastructure & Real Estate‟, „Pharmaceutical and Healthcare & Life Sciences‟ have reported the same increment

figures as last year

• ITeS sector has seen the steepest drop in salary projections despite the attrition challenge faced by the industry

• Interestingly, in most organizations employers are aware that most employees leave for better pay elsewhere

however they have either the same increment or lower increments as compared to last year


Annual Increment Trends

12%

16% 15%

12% 13%

12% 13% 13%

10%

13% 11%

12%

15%

12% 12%

10%

15% 14%

11% 12%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

InformationTechnology


EnabledServices

Infrastructure &Real Estate

Pharmaceuticals,HealthCare &LifeSciences

ConsumerBusiness &

Retail

FinancialServices

Manufacturing Energy &Resources

Media &Advertising

Other(s)

2011-12 2012-13


• The 12% increment is almost standard across the cadres

with a few organizations giving lower increments to the

Senior and Top Management level

• Majority of the sector companies have given increments to all

their employees in the range of 10-15%, across all levels –

Junior, Middle, Senior & Top Management

Top – Max; Bar – Median; Bottom - Min

• The Increment Range is wider at top management levels

as compared to junior levels


Annual Increment 2012-13

Increment Percentiles

10th 25th 50th 75th 90th

JM 10.0% 10.0% 12.0% 15.0% 15.0%

MM 9.0% 10.0% 12.0% 14.6% 15.5%

SM 7.6% 10.0% 11.0% 13.8% 15.0%

TM 7.5% 9.8% 10.0% 12.6% 15.3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 - 5 5 - 10 10 - 15 15 - 20 20 - 25 > 25

Perc

enta

ge o

f C

om

panie

s

Range of Increments

JM

MM

SM

TM

Level-wise frequency distribution

12% 12% 11% 10%

0%

10%

20%

30%

40%

50%

Increment Range

Increments are expected to be conservative, attributable to the overall economic conditions

Please Note: JM – Junior Management; MM – Middle Management; SM – Senior Management; TM – Top Management

MM JM TM SM


• Increment figures were conservative as compared to last

year with a marginal drop across all percentiles

• The overall median has dropped one percentage point to

12%

• Median annual increment percentages dropped across

levels; the reduction is highest at top management levels

by nearly 1.2% points

10th Percentile 25th Percentile Median 75th Percentile 90th Percentile

2011-12 10.0% 11.0% 13.0% 15.0% 17.0%

2012-13 9.0% 10.0% 12.0% 14.1% 15.1%



12.5% 12.3% 12.0%

11.2%

12.0% 12.0%

11.0% 10.0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

JM MM SM TM

Median Increment Across Levels

2011-12 2012-13

Increments are expected to be conservative, attributable to the overall economic conditions



• The average Variable Pay across all industries is 16%

• Variable Pay across industries has mostly remained the same or reduced as compared to last year

• The exception to this is the Manufacturing sector where the Variable Pay has significantly increased

• Information Technology, ITeS, „Energy & Resources‟, „Infrastructure & Real Estate‟ and „Media & Advertising‟ are paying the same

Variable Pay at median levels in 2012 as they did in 2011

• Consumer Business & Retail has shown a marginal increase in Variable Pay as compared to last year

• In the Financial services sector, there is a clear indication of companies moving to a more Fixed Pay structure with less

dependence on the Variable Pay


Annual Variable Pay Trends

15% 14%

15%

18% 17%

22%

13% 13% 11%

15% 14%

15% 15%

18%

20% 20%

13%

11%

0%

5%

10%

15%

20%

25%



Enabled Services



ConsumerBusiness & Retail

Financial Services Manufacturing Energy &Resources

Media &Advertising

2011-12 2012-13


• In a growing economy, the role of Senior and Top management

is pivotal in the growth of organizations. This is reflected in the

Variable Pay structure of their compensation

• Variable Pay is lower at the Middle and Junior Management

levels. At these levels, a higher emphasis is laid on the unit and

team level performances for disbursal of variable pay. The

compensation at these levels is driven by a higher Fixed

Compensation

Top – Max; Bar– Median; Bottom - Min

• Majority of the companies gave variable pay in the range of 10-

30%; with few exceptions

• The spread in the variable pay range is seen highest at the

middle and senior management levels


Variable Pay 2012-13

Variable Pay Percentiles


JM 10.0% 10.0% 14.0% 20.0% 25.0%

MM 10.0% 12.8% 15.1% 20.0% 28.4%

SM 10.0% 15.0% 20.0% 25.0% 30.0%

TM 14.6% 20.0% 22.5% 30.0% 35.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

< 10 10 - 20 20 - 30 30 - 50 50 - 80 > 80

% o

f C

om

panie

s

Range of Variable Pay


JM

MM

SM

TM


14% 15% 20% 23%

0%

20%

40%

60%

80%

100%

120%

Variable Pay (as % of CTC) Range

Trend shows overall decrease in Variable pay across industries

MM JM TM SM


• The spread of variable pay range has shown a considerable

decrease as compared to 2011 -12

• Across all industries, the variable pay has reduced most for Top

Management by 2.5% points

• The higher payout is expected to be at 30% as compared to

41% last year

• The median variable pay remains the same as compared to last

year


2011-12 9.0% 12.0% 16.0% 26.0% 41.0%

2012-13 8.9% 12.0% 16.2% 20.0 % 30.1%


Variable Pay Trends

15.0%

14.0%

19.0%

25.0%

14.0%

15.1%

20.0%

22.5%

0%

10%

20%

30%

40%

50%

JM MM SM TM

Median Annual Variable Pay (as % CTC)

2011-12 2012-13

Trend shows overall decrease in Variable pay across industries



• Attrition continues to remain a key area of concern in the Indian industry

• Junior management level faces highest level of attrition in the ITeS sector at 34%

• Pharmaceutical, Healthcare & Life Sciences faces highest overall attrition at 22%. This

is followed by ITeS and „Media & Advertising‟ at 16%

• Manufacturing and „Energy & Resources‟ faced lowest overall attrition at 8%

• The most prevalent reason employees leave organizations is better pay elsewhere

• Many employees are also seeking to upgrade their current skillsets and are leaving

organizations to pursue further studies in India and abroad

• Improved work - life balance is another area which is slowly but steadily gaining

momentum as employees seek to consciously decrease levels of stress at the

workplace

Top Attrition Challenges

1 Better pay elsewhere

2 Personal reasons

3 Pursue further studies

17%

34%

15%

22%

16%

22%

11% 10%

22% 20%

11%

17%

11%

25%

12% 13%

9% 8%

16% 14%

11% 12%

7%

23%

10% 8% 7%

11% 14%

13%

8%

1% 4%

18%

8% 8% 6%

4%

10% 9%

0%

5%

10%

15%

20%

25%

30%

35%

40%



EnabledServices



ConsumerBusiness &

Retail

FinancialServices

Manufacturing Energy &Resources

Media &Advertising

Other(s)


Attrition Analysis

JM MM SM TM


• Hiring and retaining critical talent is the

top Human Resource challenge being

faced by leaders today

• The competitive market is a key

contributor to the same

• Ability to develop managers who will be

able to take up potential leadership

positions, also seems a significant cause

of concern

• Retention of employees is also linked to

Employee Engagement and the same has

been ranked as the 3rd human resource

challenge

• Developing an Employee Value

Proposition will help organizations engage

and retain employees over the long term

Human Resource Challenges

1 Retaining critical talent

2 Hiring of skilled talent

3 Engaging the employees

Cost Optimization Measures

Outsourcing of certain services

Setting up Shared Services Centers

Headcount reduction


Human Capital Trends

• Cost optimization measures have become

increasingly important given the current

economic scenario

• Offshoring / Outsourcing of certain services

has been rated highest amongst measures

adopted. Organizations do not see value in

continually investing resources & time in

activities which are non-core to the

business

• Setting up Shared Service Centers also

helps organizations optimize existing

resources and manage work more

efficiently

• In certain cases, Headcount reduction is

also being considered, as employee cost is

significantly high in certain organizations

1

2

3


Contents

Survey Highlights

Survey Details



Participant List

Sector Analysis: Consumer Business & Retail


Increments have been conservative at 12%,

attributable to the prevalent market sentiment

The increment percentages have dropped by 1-2%

points across levels compared to last year, with

maximum impact at top management level

The median variable pay in this sector is 18%;

competitive to the industry benchmark of 16.2%

High employee turnover in this sector has made

Engaging and Retaining talent a perennial burning

priority in this sector

Outsourcing, Setting up shared services and

Freeze on company travel were the top 3 cost

optimization measures in this sector

Consumer Business & Retail

Executive Summary


Industry Overview

• The fast moving consumer goods (FMCG) segment is the fourth largest sector in the Indian

economy

• The retail segment too is experiencing exponential growth, with retail development taking place

not just in major cities and metros, but also in Tier-II and Tier-III cities

• Growing population, rising incomes, urbanization, the advent of modern retail, and a

consumption-driven society present tremendous opportunity for growth for this sector

• High brand consciousness and emergence of concepts such as quick and easy loans, EMIs, loan

through credit cards, has further made purchasing easy for Indian consumers

• Leading players of consumer products have a strong distribution network to capitalize on rising

brand consciousness and expand into yet untapped rural India

• Consolidation, Expansion, rural penetration, channel integration (both upward and downward)

and product innovation are notable trends in this sector

Key Challenges

• Counterfeiting and pass-offs taking advantage of the lack of literacy & consumer knowledge is a

challenge for the FMCG sector. They not only affect the revenues, but also undermine the brand

equity of big brands

• Apart from the pressure on margins, the biggest fear of Indian FMCG players is the introduction of

private labels as they tend to the consumer‟s price points, particularly at the mass level

• Retail today has changed from selling a product or a service to selling a hope, an aspiration and

above all an experience for a consumer, that consumer would like to relive again and again

• Foreign retailers are entering into Indian market to share a huge profit through the automatic route

in cash & carry (wholesale)

• Facing stiff competition from these global retail giants, discounting is becoming an accepted

practice which further cuts into the profit of the Indian retail players


Sector Snapshot

• The FMCG sector generated

revenues worth USD 27.9

billion in 2010

• FMCG industry expanded at

a compound annual rate of

15.4 % during 2006-10

• The Indian retail market

stands at USD 396 billion in

2011

• The organized retail segment

expected to be 9% of total

retail market by 2015 and

20% by 2020

• Semi-urban and rural

segments are growing at a

rapid pace, currently

accounting for 33 % of

revenues in 2011

Performance Highlights

Source: Deloitte Retail POV “Indian Retail

Report Changing with the changing times”;

IBEF report


40%

60%

Consumer Business Retail

Service wise Breakup Revenue wise Breakup Employee Strength wise Breakup


Participant Profile

• Close to even mix of consumer business and retail segments participated in the survey

• 82% of the participants in the consumer business sector were organizations with an Annual Revenue over ` 500 Cr. representing a

good mix of the market

• The survey received participation of companies at various maturity levels, making the mix a good representative sample of the

market. 42% of the participating organizations had an employee strength of between 500-2000, followed by 25% organizations with

less than 500 employees

18%

36%

46%

< 100 Cr. 100 - 500 Cr.

500-1000 Cr. > 1000 Cr.

25%

42%

9%

8%

8%

8%

< 500 500 - 2000

2000 - 5000 5000 - 10000

10000 - 25000 > 25000

Undisclosed Participants: 9 Undisclosed Participants: 4


12.0% 12.0% 11.8% 10.0%

0%

10%

20%

30%

40%

50%

JM MM SM TM

• The sector Median for annual Increment % is 12%, in-line

with the annual increment % median across all sectors

• Majority of the sector companies have given increments to all


Junior, Middle, Senior & Top Management


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 - 5 5 - 10 10 - 15 15 - 20 20 - 25 > 25

Perc

enta

ge o

f C

om

panie

s

Range of Increments


JM

MM

SM

TM• The spread of the Increment Range is wider at senior levels as

compared to junior levels, indicating the Top Management

increments are subjected to higher scrutiny and variation as

compared to the lower levels




Increment Range


JM 10.9% 11.6% 12.0% 14.8% 15.0%

MM 10.0% 11.6% 12.0% 13.5% 15.3%

SM 9.0% 10.0% 11.8% 12.0% 15.5%

TM 7.9% 10.0% 10.0% 11.9% 12.8%

Increments have been conservative; organizations remain cautious due to the prevailing low consumer

confidence



13.0% 13.3% 13.4% 13.5%

12.0% 12.0% 11.8%

10.0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

JM MM SM TM

2011-12 2012-13

• Increments this year have been conservative attributable to

the prevalent market sentiment

• Higher increments are expected to be around 15% as

against 17% last year, a significant 2 % points drop

• Median annual increment percentages dropped across

levels; the reduction is highest at top management levels

by nearly 3.5% points

Annual increment have dropped by 1-2% points across levels, with maximum impact at top management levels


2011-12 10.0% 11.0% 13.2% 16.0% 17.1%

2012-13 9.0% 10.8% 12.0% 12.8% 15.3%



Median Increments Across Levels



• The sector median variable pay stands at 18.2%; higher than the

overall industry median

• While most of the companies have a variable pay plan for

corporate and support staff, attractive sales incentive schemes is

a common practice for the frontline sales force to motivate them

to exceed expectations

• Monthly/Quarterly/Biannual incentive based payments against

annual payments is gaining popularity in this sector, considered

effective to motivate people in a high turnover sector like retail


Variable pay in the consumer business and retail sector (18.2%) is competitive when compared to the cross-

sector benchmark of 16.2%



• The spread in the variable pay range is seen highest at the top

management levels






JM 10.0% 10.0% 15.0% 18.5% 20.0%

MM 10.0% 11.5% 14.0% 18.5% 21.2%

SM 11.4% 15.2% 19.0% 25.0% 27.1%

TM 15.6% 19.5% 25.0% 26.3% 36.0%

15.0% 14.0% 19.0% 25.0%

0%

20%

40%

60%

80%

100%

120%

JM MM SM TM


JM

MM

SM

TM 0%

10%

20%

30%

40%

50%

60%

< 10 10 - 20 20 - 30 30 - 50 50 - 80 > 80

Perc

enta

ge o

f C

om

panie

s


Level wise Frequency Distribution


• The spread of variable pay range has considerably shrunk ;

across the sector the variable pay range between 10th & 90th

percentile has reduced to 10-28% as compared to 12-50% last

year

• At median, the variable pay percentage has increased

indicating that increasing imperative of performance based pay

across cadres is necessary to remain competitive

• A higher payout is expected to be around 30% as compared to

50% last year


2011-12 12.0% 15.0% 17.0% 28.0% 50.0%

2012-13 10.0% 14.3% 18.2% 19.0% 28.0%


Variable Pay Trends

10.0% 11.5%

16.0%

19.5% 15.0% 14.0%

19.0%

25.0%

0%

10%

20%

30%

40%

50%

JM MM SM TM


2011-12 2012-13

Senior and Top management levels have experienced significant drop in the variable pay



• High employee turnover in this sector has

made Engaging and Retaining talent a

perennial burning priority in this sector

• With customer experience becoming a

prime differentiator for a company in this

sector, the training and engagement of

the workforce has become critical

• Hiring and keeping good employees also

substantially reduces costs for employers,

which in turn affects their competitiveness

and profitability

• The failure to hire and retain qualified

people is costly in a number of ways like

loss of training investment, need for

higher inventory et al

• There is also a need to develop potential

leaders to assume leadership positions in

the organization in the long term


1 Hiring talent

2 Engaging people

3

Reasons for Attrition

Better pay

Career options

Personal Reasons




Freeze on company travel



• Attrition is a challenge faced by this sector

primarily in the Junior Management level

and in the Sales roles

• While organizations try and pay

competitively, they are still losing

employees to better pay elsewhere

• Also these jobs are not perceived as career

builders in short run as there is no clear

career path for these employees

• So within a couple of years in the job

employees either opt for further studies or

better career prospects

• Outsourcing/ Offshoring is the most

preferred route with 50% of companies;

includes outsourcing payroll, leave and

other administrative activities

• Close second is Setting up Shared Service

Centers – an option explored by several

key sector companies – to help meet the

tight budget targets

• Travel has been restricted to only Senior

and Top management level or justified

essential business requirements only

• Reduction in external hiring, overhead

expenses and balanced approach to

increase in top management salaries were

some other approaches undertaken by

participants in this sector

1

2

3

1

2

3 Training & development of potential leaders

Industry Sector Manufacturing

Sector Snapshot


Manufacturing

Executive Summary

The increments in the Manufacturing

Sector are amongst the highest across all

sectors for 2012 – 2013

At the median, Annual Increment is – 15%

Annual Increments have increased

compared to last year and this may be due

to the market corrections taking place in

the sector and it also indicates signs of

the sector slowly picking up pace.

Variable Pay median is at 20% and it has

increased compared to last year where it

was 12.5%

Top Management has received the highest

variable pay


Industry Overview

The Indian manufacturing sector is the mainstay of the entire Indian industry as

manufacturing output constitutes over 75 per cent of the index of industrial production (IIP)

India enjoys a competitive advantage on the global canvas owing to key reforms in

taxation, infrastructure and clusters (like special economic zones [SEZs]) implemented by

the Government, availability of reasonably-priced skilled labor workforce and a positive

eco-system

Recent analysis finds that rising demand in India, together with the multinationals‟ desire to

diversify their production to include low-cost plants in countries other than China, could

together help India‟s manufacturing sector to grow six fold by 2025, to $1 trillion, while

creating up to 90 million domestic jobs

Key Challenges

The country would need to fully leverage the opportunities provided by the dynamics of

globalization

India has over 60% of population in the working age group of 15-59 years. Utilizing this

huge resource of manpower in the most efficient manner is also a challenge in front of the

Indian Manufacturing Industry

To sustain or bring about further expansion in the sector, developing sound infrastructure,

visible and reliable supply chains, efficient process and updated technology would be key

• The business expectation

index (BEI), which acts as a

barometer of the overall

health of the manufacturing

sector, stood at 110.1 for the

assessment quarter while

RBI expects it at 117.2 for

the January-March 2012

quarter

• Manufacturing exports from

India could increase from

USD 40 billion to about USD

300 billion by 2015. This

would make India rake-in a

share of approximately 3.5

per cent in the world

manufacturing trade


Manufacturing

Sector Snapshot

Sources: Economist Intelligence Unit; IBEF;

Consolidated FDI Policy, Department of

Industrial Policy & Promotion (DIPP); Media

Reports


• Majority of the participants in the Manufacturing sector were organizations with an Annual Revenue over `1000 Cr. The second

highest participation came from organizations with Annual Revenue between `500-1000Cr

• 38% of the participating organizations had an employee strength of between 2000-5000, followed by 23% organizations with

between 500-2000 employees

Manufacturing

Participant Profile

Undisclosed participants - 3

9%

5%

14%

72%

Annual Revenue wise Break up

100-300cr 300-500cr 500-1000cr >1000cr

18%

8%

38%

23%

12%

<500 10000-25000 2000-5000

500-2000 5000-10000

Annual Revenue Wise Break Up Employee Strength


• The industry average for overall Annual Increment % is

15% which is higher than the overall industry

• When comparing the annual increment % across levels

and percentiles, the increments show some amount of

variation across the percentiles except at the 75th

percentile. Here the increment % remains close to 15%

• Majority of participants have given increments in the range of 10

- 18% across all levels –Junior, Middle, Senior & Top

Management

• A high variation in the increment is observed at Top Management

where majority of the increments are between 7% to 25%

• Close to 10% of the top management level is getting increments

in the 0-5% range

Manufacturing

Annual Increments 2012-13

Top – Max; Bar – Median; Bottom – Min

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 - 5 5 - 10 10 - 15 15 - 20 20 - 25 > 25

Perc

enta

ge o

f C

om

panie

s

Range of Increments


JM

MM

SM

TM

At the median (15%), Annual Increments are higher than the overall cross-sector median


JM 10.0% 12.0% 14.0% 15.3% 18.0%

MM 10.0% 12.0% 15.0% 15.5% 18.0%

SM 7.6% 10.0% 13.0% 15.0% 15.9%

TM 7.5% 10.0% 13.0% 15.0% 20.0%

14% 15% 13% 13%

0%

10%

20%

30%

40%

50%Increment Range


MM JM TM SM


• Inflation continued to be a concern for the manufacturing

sector in the beginning of the last year due to lower demand

from the domestic as well as export markets. Plus the high

interest rate by the RBI put more pressure on the

manufacturing sector

• Inspite of this, the sector showed the strongest improvement in

business conditions since May 2011. This is reflected in the

industry median for annual which is 15%

• Overall the sector is relatively bullish as compared to last year

• The median increments for junior and middle is reported at

14% & 15% respectively whereas that for senior and top is

reported at 13%

• The increment given to the top management level remains the

same at 13% whereas there is a small dip in the increments

for senior management by 1% point

Manufacturing

Annual Increments Trends

Increments at the median level (15%) have increased considerably compared to last year (12.3%)


2011-12 9.3% 12.0% 12.3% 14.0% 17.7%

2012-13 9.0% 12.0% 15.0% 15.0% 17.0%

13.4% 14.0%

14.0%

13.0%

14.0% 15.0%

13.0% 13.0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%


2011-12 2012-13

MM JM TM SM



• The industry median variable pay % is around 20% which is

higher than the overall industry benchmark of 16.2%

• Top Management has received the highest Variable Pay

• The highest variation in the variable pay ranges have been

observed for the Top and Middle Management ranging from 10%

to 45% and 5% to 40% respectively; the lowest variation is found

for the Junior Management

• Majority of the organizations gave variable pay to Junior, Middle

and Senior Management employees within the range of 10%-

20%

• The Top Management in the majority of the organizations in this

sector received variable pay in the range of 10- 45%

• The Senior Management have received variable pay in the range

between 9% to 40%

Manufacturing



Variable pay % in the manufacturing sector (20%) is above the overall cross-sector benchmark of 16.2%



JM 10.0% 10.0% 15.0% 20.0% 29.3%

MM 10.6% 14.4% 15.0% 22.9% 28.5%

SM 13.5% 15.0% 20.0% 30.0% 30.0%

TM 15.0% 20.0% 21.8% 28.0% 34.5%

15% 15% 20% 22%

0%

20%

40%

60%

80%

100%

120%Variable Pay (as % of CTC) Range

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

< 10 10 - 20 20 - 30 30 - 50 50 - 80 > 80

Pe

rce

nta

ge

of

Com

pa

nie

s



MM JM TM SM

JM

MM

SM

TM



• The sector median for variable pay % is 20%. This is higher

than the median for last year which was at 12.5%

• Across all levels, median Variable Pay as a percentage of

Cost To Company (CTC) for Top and Senior Management is

the maximum 22% and 20% respectively followed by Middle

Management and Junior Management at 15%

• The median variable pay % has shown an increase across all

levels except Top Management, where it is nearly constant

as compared to last year.


2011-12 7.0% 11.0% 12.5% 15.0% 18.0%

2012-13 12.0% 16.3% 20.0% 25.0% 30.0%

Manufacturing

Variable Pay

The median variable pay % has shown a considerable increase across all levels

8% 11%

15%

22%

15.0% 15.0%

20.0%

21.8%

0%

10%

20%

30%

40%

50%


2011-12 2012-13

MM JM TM SM



• The top HR priorities for 2012-2013

broadly reflect the components of the

talent management cycle which begins

with hiring of skilled labour, retaining

critical labour and engaging them

• Training & development of potential

leaders is indicated as the top most

priority

• Following closely as the next top priority is

the retention of critical talent. The sector

is becoming highly competitive with

international companies setting-up their

base in India and poaching talent from

local markets

Top 3 HR Challenges

1 Training & developing potential leaders

2 Retaining of Critical Talent

3 Engaging Employees

Key Reasons for Attrition

Better Pay

Personal Reasons

Pursue Further Studies




Headcount Reduction

Manufacturing


• Better Pay has been ranked as the topmost

reason for attrition in the manufacturing

sector

• The 2nd focus area also reflects that

employees also leave organizations for a

variety of personal reasons ranging from

relocation, marriage etc.

• Employees are also looking to upgrade

their skills and education and leaving

organizations to pursue higher education in

India and abroad

• Among the above measures, Setting up

Shared Services is the most preferred route

that companies prefer taking with regard to

cost optimization measures. Earlier, this

option was utilized more by the IT/ITES

sector, however, looking at the current

market, even many manufacturing

companies are exercising this option

• This is closely followed by

Outsourcing/Offshoring of non essential

activities that is being undertaken by many

organizations

• Drastic measures such as Reduction in

Headcount also features in the top three

cost optimization measures

1

2

3

1

2

3

Sector Analysis Infrastructure & Real Estate



Executive Summary

The increments in the Infrastructure and

Real Estate sector are amongst the

highest across all sectors for 2012 – 2013

At the median (15%), Annual Increments

are considerably higher than the overall

cross-sector median

Annual Increments at median level are the

same as compared to last year

Variable Pay is not a sector-wide practice

Variable Pay median for this sector is at

15% and is the same as compared to last

year


Industry Overview

• There has been a significant injection of foreign direct investment (FDI) during the last

financial year – in the vicinity of 23.6 % growth

• With regards to the Real Estate sector, the Indian economy has witnessed robust growth in

the last few years and in the coming years, is predicted to be one of the fastest growing

sectors in India

Key Challenges

Infrastructure constantly playing catch-up to growing population and urbanization demands

Challenges to the Real Estate industry revolve around transparency, limited market history,

forecasting difficulties as well as complexities regarding ownership records and land titles;

further hampered by lack of proper urban planning

• As per the Government

projections, Indian

infrastructure industry is

aiming to attract investments

worth USD 1 trillion during

the 12th Plan Period (2012-

17), with at least 50 per cent

funding from the private

sector

• The Real Estate industry in

in India is expected to grow

at 19% over the next 3 years

– with a major chunk of it

focused on Tier 1 cities. The

revenue currently stands at

around USD 66.8 billion for

the entire industry



Sector Snapshot

Sources: Economist Intelligence Unit;

IBEF; Consolidated FDI Policy,

Department of Industrial Policy &

Promotion (DIPP); Media Reports


22%

22% 45%

11%

Employee Strength

< 500 > 25000 10000 - 25000

2000 - 5000 500 - 2000 5000 - 10000

• Majority of the participants in this sector were organizations with an Annual Revenue of over `1000 Cr. The second highest

participation came from organizations with Annual Revenue falling in the range of ` 500-1000 Cr

• 45% of the participating organizations had an employee strength of between 500-2000, followed by 22% organizations with

between 2000-5000 as well as <500 employees each


Participant Profile

Undisclosed participants - 3 Undisclosed participants - 3

11%

45% 11%

11%

22%


< 100 Cr. > 1000 Cr. 100 - 300 Cr.

300 - 500 Cr. 500-1000 Cr.


• The industry median for increments for this sector is 15%.

• The maximum range of increments for Middle and Senior

management levels is around 20%

• The Top Management range is high, however the median

is very low, which means that it is affected by one

organization projecting very high increment figures


• Majority of Infrastructure and Real Estate companies have given

increments in the range of 10-14% and a significant number of

organizations have also given increments in the range of 15 –

19%, across all levels –Junior, Middle, Senior & Top

Management

• Overall, we see a lot more companies giving greater increments

to Junior and Middle Management than Top Management

• However, increment levels have fallen this year as compared to

last year



Annual Increment median for this sector is at 15%

12.5% 12.5% 15.0%

10.0%

0%

10%

20%

30%

40%

50%

JM MM SM TM

Increment Range

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 - 5 5 - 10 10 - 15 15 - 20 20 - 25 > 25

Pe

rce

nta

ge

of

Com

pa

nie

s

Range of Increments


JM

MM

SM

TM



• The industry Median for annual Increment % is 15%. This is

higher than the overall annual increment % median (12%)

• Increments have fallen considerably compared to last year

with organizations at the 90th percentile also giving

increments at 5% points less than last year

• This could be because major market corrections were carried

out across the industry last year – giving rise to high increment

levels then – a strategy that was employed by most

organizations to retain skilled/trained employees

• Across all levels, Annual Increment (%) median for Top

Management (10%) is considerably lower than Senior

Management (15%), as well as Junior and Middle

Management (12.5%) levels


2011-12 12.1% 13.6% 15.0% 19.6% 21.8%

2012-13 6.4% 10.0% 15.0% 15.9% 16.8%

15.0% 15.0% 15.5%

12.6%

12.5% 12.5%

15.0%

10.0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

JM MM SM TM


2011-12 2012-13



Annual Increments have reduced compared to last year; median increment for this sector still high compared

to overall cross-sector median for annual increment



• The industry median variable pay % for the sector is 15%

• Senior and Top Management have received the highest variable pay.

At the Junior level, employees have received around 12.2% at median

– however there are some organizations that do not give Variable Pay

to their lower management levels

• Note: Variable Pay is not a sector-wide practice as half the

organizations participating in the study did not have a variable pay

scheme in place. These participants may give out ad-hoc bonuses

instead. Also, no company gave variable pay in the range of 30-50%

to Top management.




Variable Pay is not a sector-wide practice

12.2% 15.1% 20.0% 20.0%

0%

20%

40%

60%

80%

100%

120%

JM MM SM TM



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

<10 10-20 20-30 30-50 50-80 >80

Pe

rce

nta

ge o

f C

om

pan

ies

Level-wise Frequency Distribution

JM

MM

SM

TM

• Majority of the organizations in this sector gave variable pay to

their Senior Management in the range of 10-20%. Most of these

were at the upper limit of this range (i.e. at or near 20%). The

same is true for Top Management

• 83% of the organizations also gave their Middle Management

variable pay in the range of 10-20%.

• Majority of the organizations that gave variable pay to Junior

Management, did so in the range of 10-15%


• The sector median for variable payout % is 15%

• Across all levels, Variable pay (%) median for Top and

Senior Management is the maximum (20%), followed by

Middle Management (15.1%), and then Junior

Management (12.2%)

• For Middle and Senior Management, the median variable

pay % has increased a lot as compared to last year.

• Overall, the median variable pay % for this sector has

increased marginally. However, this is still lower than the

overall industry median Variable Pay % (16.2%)

• One important point to note is the change in the ratio of

variable pay component as a percentage of CTC which

shows an upward trend. This shows an inclination

towards more standard processes and methods of reward

and a shift away from ad-hoc rewards


2011-12 8% 11% 14.5% 15% 16%

2012-13 9.5% 12.75% 15% 15.75% 18.5%


Variable Pay

Variable Pay % median is at 15%; lower than the overall cross-sector median (16.2%)


10% 12%

16%

20% 12%

15%

20% 20%

0%

10%

20%

30%

40%

50%

JM MM SM TM


2011-12 2012-13


• This sector is concerned with the

challenges posed by Talent – especially

by Training & Development and Hiring

Talent which are the most wide-spread

challenges and also the most crucial

ranked challenges

• This is a niche sector and hence difficult

to find established leaders in this space

and hence training and developing

potential leaders is the biggest potential

challenge faced by the sector

• While engaging employees, organizations

may also want to look at leveraging ways

to introduce some degree of work-life

balance so as to also reduce attrition

Top 3 HR Challenges

1 Hiring Skilled Talent

2 Training & Development

3 Engaging Employees


Better Pay

Further Studies

Work-Life Balance


Setting up Shared Service Centers

Outsourcing / Offshoring

Freeze on Company Travel

• Better Pay has been indicated to be the

Number 1 reason for attrition in this sector,

even though the increments are high this

year

• The need for an improved work-life balance

is one of the top three reasons for attrition

and this is something that the sector as a

whole may need to look at particularly

• Better career opportunities, further studies,

personal reasons are the most wide-spread

reasons for attrition in this sector

• Among the above measures, Setting up of

shared services centers and freezing

company travel are the two options that

majority of the companies have/plan to

explore for cost optimization; this is closely

followed by outsourcing/offshoring certain

services. These are methods taken up by

many organizations across all sectors

• Shared Service Centers and Outsourcing

involve significant initial investment but

from a long term perspective, they are

strategic investments and will save huge

costs

• Some organizations also plan to

explore/have explored the option of

headcount reduction, although this is not

the preferred method

1

2

3

1

2

3



Sector Analysis Pharmaceuticals, Healthcare & Life Sciences


Pharmaceuticals, Healthcare & Life Sciences

Executive Summary

The increments in the Healthcare sector are

amongst the lowest across all sectors for 2012 –

2013

Median annual Increments for this industry are

the same as the overall industry median - 12%

Median Variable Pay % is at 15%

Variable Pay is spread across a wide range

across levels

Variable pay is not necessarily a sector-wide

practice as a few participants do not have a

Variable Pay scheme in place

Attrition is highest at Middle Management level


Industry Overview

• Healthcare expenditure in India expected to increase by 12% per annum between 2011-15

• Foreign Direct Investment in the country has increased and is now worth USD 1,183.04

million in hospitals and diagnostic centers and USD 9,170.24 million in drugs and

pharmaceutical space

• Recently, there have been a large number of acquisitions of domestic pharmaceutical

companies by foreign majors

• Increasing Government expenditure on public healthcare expected

• The industry‟s growth forecast is defined by rising incomes of the urban middle-class in

particular, leading to greater affordability of private healthcare facilities, a growing aged

segment of the population, and increasing risks from changing disease patterns and large

population of lifestyle diseases like Diabetes, Cancer, etc.

Key Challenges

The Government has made/proposed a lot of policy changes to control the rate of

takeovers of domestic pharmaceutical companies by large MNCs, in order to control the

price of medicines

The threat of controlled licenses being awarded to companies to manufacture patented

drugs at cheaper rates

Major companies are facing several patent related issues which have major impact on their

exclusive revenue streams – this is giving rise to the need for organizations to find cost-

cutting solutions

• The industry stands at USD

36 billion today and is

expected to grow at 15% per

annum

• The revenue of the industry

is expected to reach USD

280 billion between 2012 –

2022

• Contract Research and

Manufacturing Services to

increase at the rate of

around 13% per annum

globally over the next few

years



Sector Snapshot

Sources: Economist Intelligence Unit;

Corporate Catalyst India; Department of

Industrial Policy & Promotion (DIPP);

IBEF


9%

37%

36%

9%

9%


< 100 Cr. > 1000 Cr. 100 - 300 Cr.

300 - 500 Cr. 500-1000 Cr.

23%

15%

39%

15%

8%

Employee Strength

< 500 > 2500010000 - 25000 2000 - 5000500 - 2000 5000 - 10000


• Majority of the participants in the Healthcare sector were organizations with an Annual Revenue of over `1000 Cr. The second

highest participation came from organizations with Annual Revenue between `100-300 Cr

• 39% of the participating organizations had an employee strength of between 2000-5000, followed by 23% organizations with less

than 500 employees


Participant Profile


• The ranges of the increments also do not vary much across levels

– the majority lying between 9 to 15 %

• When comparing the median annual increment % across levels

and percentiles, the increments are standard at 12%


• Majority of Health Care companies have given increments to all


Junior, Middle, Senior & Top Management causing the overall

increments in this sector to remain relatively low

• Within the range of 10-14% the Top Management increments are

all stable at 12% across organizations

• The 12% increments are also mostly standard across the other

levels with a few organizations giving higher increments to the

Junior and Middle Management (15-19% range) 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0-4 5-9 10-14 15-19 20-24 >25

Perc

enta

ge o

f C

om

panie

s

Range of Increments




The increments in the Healthcare sector are amongst the lowest across all sectors for 2012 – 2013

12.0% 12.0% 12.0% 12.0%

0%

10%

20%

30%

40%

50%

JM MM SM TM

Increment Range


JM

MM

SM

TM



exactly the same as the overall annual increment % median

across all sectors

• There is a marked difference at the Top Management level

where the Annual Increment (%) has increased from 10% last

year to 12% this year

• While the median increments have remained stable across all

levels, a lot of companies opt for compensating for this with

attractive sales incentive schemes in this sector

• While considering overall ranges of increments, the median

has remained the same as last year. Increments have reduced

slightly at the 75th and 90th percentile. This is a trend followed

by many different sectors


2011-12 10.0% 10.3% 12.0% 14.0% 14.7%

2012-13 10.4% 11.5% 12.0% 12.8% 13.8%

12%

10%

12% 12% 12% 12%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

JM MM SM TM


2011-12 2012-13



The median increment in the Healthcare sector is at 12% for 2012-13



• Senior and Top Management have received the highest variable pay.

At the Junior level, employees/sales staff have received better

increments as the variable pay component makes up a lesser fraction

of their pay; although, the variable pay range is quite broad for Junior

levels

• Note: 4 companies in this sector did not have a Variable Pay scheme.

However, sales incentives were provided to the employees as is the

prevalent practice in this sector




Variable Pay has a wide range across levels; not necessarily a sector-wide practice

10.2% 15.0%

20.0% 20.0%

0%

20%

40%

60%

80%

100%

120%

JM MM SM TM



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

<10 10-20 20-30 30-50 50-80 >80

% o

f C

om

pan

ies


JM

MM

SM

TM

• Among the companies that do give a Variable Pay, the majority

of the organizations gave variable pay to Junior, Middle and

Senior Management employees within the range of 10-20%

• The variable pay hovers between 10-15% for Middle

Management and between 10-12% for Junior Management

• This is also balanced with attractive sales incentives, especially

for Junior Management where it matters the most

• Senior Management variable pay % mainly hovered around

20%.

• Top Management has received Variable pay across several

ranges, however the median is at 20%


• The sector median for variable pay % is 15%. This is below

the overall industry median variable pay % at 16.2%

• Across all levels, Variable pay (%) median for Top and

Senior Management is the maximum (20%) , followed by

Middle Management (15%), and then Junior Management

(10.2%)

• While the Median Variable Pay % across Junior, Middle and

Senior Management has remained almost constant since last

year, this has dropped considerably for Top Management this

year

• The variable pay for this sector is the lowest at Junior and

Middle Management levels


2011-12 14% 16% 18% 21% 29%

2012-13 8.7% 9.5% 15% 16.5% 32%

11%

15%

20% 25%

20%

0%

10%

20%

30%

40%

50%

JM MM SM TM


2011-12 2012-13


Variable Pay

Variable Pay % median for this sector is at 15%



• Retaining critical talent is of great

importance in this sector as information is

sensitive and organizations would not

want to lose employees and vital

information to competitors – especially in

the current environment in which the

sector is operating

• Engaging employees and hiring skilled

talent could also be indicative of a dearth

of qualified new talent pools that

organizations can tap into

• This indicates towards a significant

concern in the sector regarding the talent

practices and pinpoints an area where

organizations need to concentrate future

efforts in HR

Top 3 HR Challenges

1 Retaining Critical Talent

2 Engaging People



Better Pay

Personal Reasons

Better Career Opportunities




Freeze on Company Travel

• At 25%, the Middle Management in the

Healthcare sector shows the highest

attrition rates across all sectors and levels

• Organizations in this sector have recorded

a decrease in the annual increment %

which may be one of the causes of the high

rank for “Better pay”

• The dynamic nature – especially of the

sales aspect of this sector – is also

responsible for high attrition and a high

rank to leaving for “Better Career

Opportunities” with “Better Pay”

• Pursuing further studies also ranks high as

a reason for attrition. Especially at Junior

Management level, the average profile of

sales staff would be that of a graduate

looking to pursue post-graduation or MBAs

• Among the above measures, Outsourcing/

Offshoring is the most preferred route that

companies prefer taking with the majority of

the participants selecting this option –

generally outsourcing payroll, leave and

other administrative activities

• This is followed by Setting up Shared

Service Centers – an option explored by

several key pharmaceutical companies – to

help focus on core activities

• Freezing on company travel is also another

option considered by some companies in

order to reduce costs. Organizations are

also considering moving towards video-

conferencing facilities and making tough

decisions on the extent of travel required by

their personnel

1

2

3

1

2

3



Sector Analysis: Financial Services


The median increments in the sector is 10% in 2012-13,

2% points lower than overall industry median of 12%

Increments have been frozen across levels in some

participant companies in this sector

The median variable pay announced this year is 20%;

lower by 2% points compared to 22.3% in 2011-12

There is a marked decrease in the range of variable

payout; from 0-120% in 2011-12 to 10-80% in 2012-13

Skilled talent – hiring, retention and development is

critical is a priority for this sector

The sector noticed some strong cost optimization

measures like head count reduction, curtailment of

employee training and recognition program

Financial Services

Executive Summary


Industry Overview

• The Financial Stability Report by RBI for December 2011 observes that the domestic financial

system remains stable in the face of an adverse international backdrop

• Rising incomes are driving the demand for financial services across income brackets

• Financial inclusion drive from Reserve Bank of India (RBI) has expanded the target market to

semi-urban and rural areas

• Ratings agency Moody's believe that strong deposit base of Indian lenders and Government's

persistent support to public sector and private banks would act as positive factors for the `64

trillion Indian banking industry amidst the negative global scenario

• Fitch Ratings says that the outlook on the major Indian NBFC sector is stable in 2012, but

remains cautious on the medium-term outlook of the sector in view of challenges in raising cost-

effective funding that may squeeze margins, impair growth prospects and increase the costs of

raising fresh capital

• In capital markets, asset management industry in India is among the fastest-growing in the world,

grown four fold in past 5 years

• The Indian Insurance sector is expected to reach around USD 400 billion in premium income by

2020

Key Challenges

• Slow down in GDP growth could have some downstream impact on asset quality

• Additional capital will need to be raised due to the compulsions of implementation of Basel III, a

growing (albeit at a potentially decelerated rate) economy and financial inclusion

Financial Services

Sector Snapshot

• The banking sector reported

a growth rate of 19% (CAGR)

over the last three years

• Bank loans registered a

growth of 16.4% in 2011-12,

while deposit growth stood

at 14%

• More than 80 per cent of

equipment leasing and hire

purchase activity in India is

financed by NBFCs

• The investable assets of

HNWIs in India has grown at

a healthy 26% CAGR over

2005-10

• FIIs have invested in stocks

and debt securities worth $ 9

billion in the fiscal 2011-12

• Over 2003-10, life insurance

premiums increased at a

CAGR of 25% and the non

life insurance premiums

increased at a CAGR of 18%


Source: www.sebi.gov.in; www.rbi.gov.in; IBEF report, Fitch Ratings


Service wise Breakup Revenue wise Breakup Employee Strength wise Breakup

Financial Services

Participant Profile

• The Indian financial sector includes banks, non-banking financial companies(NBFCs), Capital Market and Insurance Companies. The

survey had a close to even mix of companies participating in it

• 61% of the participants have revenue more than ` 300 crore, a good representation of the industry at large

• The survey received participation of companies at various maturity levels, with 29% organizations with less than 500 employees,

followed by 21% of the participating organizations having employee strength of between 500-2000

25%

28% 16%

31%

Bank Capital Market

Insurance NBFC

17%

22%

9% 17%

35%

< 100 Cr. 100 - 300 Cr.

300 - 500 Cr. 500-1000 Cr.

> 1000 Cr.

29%

21% 18%

11%

14%

7%

< 500 500 - 2000

2000 - 5000 5000 - 10000

10000 - 25000 > 25000

Undisclosed Participants: 4 Undisclosed Participants: 3


• The increments paid out in the Financial Services Sector

is 10%, 2% points lower than cross sector median of 12%

• Increments have been frozen across levels in many

participant companies in this sector

• Employees in the lower and middle management levels

will receive increments in the range of 8-12%; the highest

increment to be 16% given at junior management level


• The spread in the increment range is seen highest at the senior

management levels; about 50% companies are giving out

marginal increments in the range of 5-8% of CTC

Financial Services



Increment Range


JM 8.1% 10.0% 10.0% 12.7% 15.0%

MM 7.6% 9.5% 10.0% 11.3% 12.4%

SM 7.1% 8.0% 10.0% 10.0% 12.2%

TM 5.4% 7.4% 9.3% 10.0% 11.0%

10.0% 10.0% 10.0% 9.3%

0%

10%

20%

30%

40%

50%

JM MM SM TM

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 - 5 5 - 10 10 - 15 15 - 20 20 - 25 > 25

Pe

rce

nta

ge

of

Com

pa

nie

s

Range of Increments


JM

MM

SM

TM

The annual increments have been somber with few participants having decided against any increments



• 2011– 2012 was a relatively subdued year for the economy

with most of the companies treading on the side of caution

• The increments announced this year is substantially low by

3-4% points compared to last year, indicating less take

home for the employees

• Increments across cadres will reduce to the tune of 2%

points as compared to last year

• The increased regulatory influence in the western markets

is expected to have an impact on all payouts and

increments, particularly in the Indian Investment Banking

sector


2011-12 10.0% 11.0% 12.5% 15.0% 18.2%

2012-13 7.6% 9.3% 10.0% 11.0% 12.9%

Financial Services



12.5% 13.0%

12.0% 11.4%

10.0% 10.0% 10.0% 9.3%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

JM MM SM TM

2011-12 2012-13

Companies restricted increments for employees falling in the higher pay bracket; percentage to drop

significantly at the senior levels





• The variable pay in the banking sector, traditionally high, are

slowly being competitive to the industry practices

• The frequency of payout is generally annual, but there is a

growing trend of quarterly/biannual payouts particularly in junior

management levels in NBFCs to ensure higher engagement and

performance levels


• Payout distinctly differs within business segments in financial

services such as Banking, Insurance, Capital markets and NBFCs

• An indicator of the high caution levels within the financial services

organizations, and an effort to bring in more accountability for

sustainable performance

Financial Services


Variable Pay (% CTC) Percentiles

Variable Pay (% CTC) Range


JM 10.0% 11.5% 15.0% 22.5% 53%

MM 12.3% 14.8% 20.0% 31.3% 71%

SM 13.6% 16.5% 22.0% 26.3% 52%

TM 14.7% 20.5% 25.0% 30.0% 40%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

< 10 10 - 20 20 - 30 30 - 50 50 - 80 > 80

% o

f C

om

panie

s



JM

MM

SM

TM

15.0% 20.0% 22.0% 25.0%

0%

20%

40%

60%

80%

100%

120%

JM MM SM TM

Variable Pay to be given across all levels with average payout to be around 20% to 25% of CTC



• With increased regulatory influence for real and sustained

profitability, the sector traditionally known for its aggressive

performance based pay policy, appears to mellow down and

align itself to common industry practices

• The variable pay announced this year is substantially low as

compared to last year

• Due to change in regulation, Private banks and Investment

Banks are looking to review their structure with regards to

component of Variable Pay to Fixed Pay as per levels (Ref.

Deloitte Study on Variable Pay in Investment Banks)

• There is a clear indication of some companies moving to a

more Fixed Pay structure with less dependence on the Variable

Pay component


2011-12 3.0% 14.0% 22.3% 45.0% 74.0%

2012-13 13.1% 15.8% 20.0% 26.3% 48.0%

Financial Services

Variable Pay Trends

15.0%

20.0%

28.0%

38.0%

15.0%

20.0% 22.0%

25.0%

0%

10%

20%

30%

40%

50%

JM MM SM TM


2011-12 2012-13

The variable payouts in the current financial year will be bleak compared to last year as a result of uncertainty in

the global markets, particularly at senior levels



• In this sector, competent workforce is

critical to ensure margins in the intense

competition in the markets workforce

• Every competitor is looking for the highest

quality employee. Skilled talent – hiring,

retention and development is critical is a

priority for this sector

• The failure to hire and retain qualified

people is costly in a number of ways like

loss of training investment, loss of

valuable customer relationships and

intelligence et al

• There is also a need to develop potential

leaders to assume leadership positions in

the organization in the long term


1 Hiring talent

2 Retaining People

3 Training & development of potential leaders

Reasons for Attrition

Better pay

Better career options

Personal Reasons




Freeze on company travel

Financial Services


• The sector is heavily dependent on skilled

manpower, strong customer relationships

and efficient customer service

• A good employee is an asset to the

companies and every company in the

market is looking for the highest quality

employee

• Employees too exploit these opportunities

available in the market. Frequent job

changes are a common norm in this

sector, for better pay or career growth

• Improved work life balance, further studies

and better utilization of skill sets are some

other reasons for attrition identified in this

sector

• Outsourcing/ Offshoring is the most preferred

route with 60% of companies; includes

outsourcing payroll, leave and other

administrative activities

• Close second is Setting up Shared Service

Centers – an option explored by several key

sector companies – to help meet the tight

budget targets

• Travel has been restricted to only Senior and

Top management level or justified essential

business requirements only; cost reduction

measures include employees being

downgraded from Business to Economy class

travel

• This sector also noticed some strong cost

optimization measures like head count

reduction, curtailment of employee training

and recognition program

1

2

3

1

2

3

Sector Analysis Information Technology



Executive Summary

The increments paid out in the Information

Technology Sector have been conservative this

year, reflecting the mood of the industry

The industry median for overall Annual

Increment % is 11%

The sector median for variable pay is 15.1%.

This is the same as the median for last year

Hiring of skilled talent has come up as a major

HR challenge being faced by the industry


Industry Overview

• Over the years, Indian IT service offerings have evolved from application development and

maintenance, to emerge as full service players providing testing services, infrastructure

services, consulting and system integration

• Central to this strategy is the growing customer acceptance of Cloud-based solutions which offer

best in class services at reduced capital expenditure levels

• There has been a considerable pull in traditional segments – custom application development,

application management, IS outsourcing and software testing

• Increased acceptance from mature segments such as BFSI, US, and large corporations, and

emerging segments such as retail, healthcare, utilities, SMBs, Asia Pacific and RoW

• Industry re-tooling itself to adjust to rapid change in customer priorities – from SLAs to increased

time-to-market

• Emerging technologies – cloud computing, mobility, social media and big data/analytics

unleashing new opportunities for the industry

Key Challenges

• Economic Slowdown in west: Despite risk mitigation efforts from the organizations slow down

would effect IT negatively. IT, ITES has its revenue stream linked to the western markets

• Attrition and retention of talent is a big challenge faced by the industry

• Lack of trained people- The supply and demand of quality engineers who are capable is having a

huge gap

• IT services exports is the

fastest growing segment,

growing by 19 per cent in

FY2012, to account for exports

of USD 40 billion

• IT services is the fastest

growing segment in the Indian

domestic market, growing by 18

per cent to reach `589 billion,

driven by increasing focus by

service providers

• Over 73 per cent of the revenue

comes from the export market

• Top firm firms share around 35

per cent of total industry

revenue showing that the

market is fairly competitive

• Global IT offshore spending

expected to grow at CAGR of

6.2 per cent during FY08-13.



Sector Snapshot

Sources: Nasscom; Deloitte Reports


14.3%

28.6%

14.3%

42.9%

Employee Strength

< 500 500 - 2000 2000 - 5000

5000 - 10000 10000 - 25000 > 25000

20.0%

80.0%

Annual Revenue wise Breakup

< 100 Cr. 100 - 300 Cr. 300 - 500 Cr.

500-1000 Cr. > 1000 Cr.


• Majority of the participants in the IT sector were organizations with an Annual Revenue of above 1000 Cr

• 43% of the participating organizations had an employee strength more than 25000 employees


Participant Profile


• The industry median for overall Annual Increment % is 11%

• The range of increments is between 10 to 20 %. That is mostly due

to the difference in the maximum & minimum increments paid to

Junior and Top management

• Median for increments is highest for junior and middle

management, and lowest for top management


• Majority of IT companies have given increments to all their

employees in the range of 10-12%, across all levels –Junior,

Middle, Senior & Top Management causing the overall

increments in this sector to remain relatively low

• Top Management increments across organizations have been

the lowest

• Economic slowdown in the West has impacted the overall

sentiment in India and this has reflected in overall lower

projections for the year



The increments paid out in the Information Technology Sector have been conservative this year, reflecting the

mood of the industry

12.0% 10.0% 10.0% 9.0%

0%

10%

20%

30%

40%

50%

JM MM SM TM

Increment Range 2012-13


JM 10.8% 12.0% 12.0% 12.7% 13.4%

MM 9.8% 10.0% 10.0% 12.0% 12.1%

SM 7.6% 9.0% 10.0% 10.5% 11.2%

TM 6.8% 8.0% 9.0% 10.0% 10.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 - 5 5 - 10 10 - 15 15 - 20 20 - 25 > 25

Perc

enta

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f C

om

panie

s

Range of Increments



JM

MM

SM

TM


• The industry Median for annual Increment is 11% and is

marginally lower than last year. The increments across cadres are

expected to reduce as compared to last year, pointing towards the

uncertain market sentiment

• While considering the overall scenario in IT, increments have

reduced at all percentiles. This is a trend observed in many other

sectors too

• The maximum drop in the annual increments for the levels is a 1.3

% point drop for middle management

• Senior management seems to be the only level which hasn‟t seen a

drop in increment from last year. This may indicate the increasing

focus of the companies towards their senior management and it

looks like they have been rewarded for their expertise and

organizations want to retain this cadre over the long term


2011-12 10.9% 11.0% 12.0% 13.0% 14.2%

2012-13 8.9% 9.8% 11.0% 12.0% 13.3%



The increments paid out in the Information Technology Sector have been conservative this year, reflecting the

mood of the industry


13.0%

11.3% 10.0% 10.0%

12.0%

10.0% 10.0%

9.0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

JM MM SM TM

2011-12 2012-13



• The overall median variable pay stands at 15.1%

• The variable pay ranges from less than 10 % to upto 50 %

across all levels, with Top and Senior management seeing the

maximum spread

• Senior and Top Management have received the highest variable

pay. For the middle levels too, the variable pay has been on the

higher side


The average variable pay paid out in the IT Sector is 15%

• The spread of variable pay is highest for the top

management level





JM 8.0% 10.0% 10.5% 13.5% 19.0%

MM 7.1% 10.0% 15.0% 22.5% 25.2%

SM 13.3% 15.0% 20.0% 28.0% 35.0%

TM 15.0% 17.5% 25.0% 40.0% 47.0%

11% 15% 20%

25%

0%

20%

40%

60%

80%

100%

120%


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

< 10 10 - 20 20 - 30 30 - 50 50 - 80 > 80

Perc

enta

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f C

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panie

s



JM

MM

SM

TM MM JM TM SM


• The sector median for variable pay % is 15.1%. This is

almost similar to last year‟s median, 15%

• Across all levels, Variable pay (%) median for Top

Management is the maximum (25%) , followed by Senior

Management (20%), and then Middle (15%) & Junior

Management (10.5%)

• Top Management level has received better variable pay as

compared to all other levels for the sector


2011-12 7.3% 12.6% 15.0% 16.0% 22.2%

2012-13 8.4% 11.9% 15.1% 19.0% 27.5%


Variable Pay

The average variable pay paid out in the IT Sector is 15%

8%

11%

15%

22% 10.5% 15.0%

20.0%

25.0%

0%

10%

20%

30%

40%

50%


2011-12 2012-13

MM JM TM SM


• The Top HR priorities for 2012-13 clearly

indicates the challenges that the industry

as a whole has been facing and need to

work on

• Hiring of skilled talent has come up as the

most critical challenge in this sector as

the industry is in a competitive mode and

with increase in the number of IT

companies in the industry, the fight for

best talent is greater than ever

• Training & Developing Potential Leaders

& Engaging employees come up as the

other two top concerns indicating the

concern areas where the firms need to put

in a dedicated efforts. Employees form the

basis of IT industry as it is a service

industry, training & developing employees

to keep them abreast thus forms a major

challenge

Top 3 HR Challenges


2 Training & Developing

3 Engaging People


Better Pay

Personal Reasons

Better utilization of current skills




Reduction in Training Programs

• Most of the employees have given better

pay as the topmost reason to leave points

to increasing presence of MNCs with

better pay scales in the industry

• Better utilization of current skills is one of

the top attrition reasons

• Employees also leave organizations for

personal reasons like marriage, relocation

etc.

• Amongst all the above measures,

Outsourcing/Offshoring comes up the most

preferred way of cost optimizing

• Setting up of Shared Service Centers has

come up as the second most important

option being considered in order to reduce

costs

• Training programs form a huge part of the

cost for IT companies, thus, it has emerged

as one of the top three initiatives being

undertaken. Though this comes in contrast

to the fact that IT firms are also looking at

Training as an HR Challenge and want to

focus on the same

1

2

3

1

2

3



Sector Analysis Information Technology Enabled Services


Information Technology Enabled Services

Executive Summary

The median increments paid out in the Information

Technology Enabled Services Sector (12%) is

similar to overall industry increment (12%)

This is quite low as compared to last year’s median

(15.5%). The biggest drop in increments is seen at

the senior management level

The variable pay for ITES is the highest for the Top

management levels

The industry overall average variable pay % is

13.5%

Pursuing further studies and leaving organizations

due to better pay elsewhere has come up as one of

the major reasons for attrition


Industry Overview

• In the last few years, the ITES segment has been focusing on re-engineering itself in order

to deliver transformational impact to customers. BPO firms are moving from efficiency to

effectiveness

• A „Verticalised‟ approach has been a key marketing strategy – developing in-depth

capabilities across the entire value chain in specific verticals

• Indian ITES firms are developing future-ready solutions – platform + cloud and creating

customer impact though service delivery excellence.

• They are also increasing their onshore and near-shore footprint to enable customer entry

into local markets

• Firms have also been actively implementing non-linear growth initiatives that ensure higher

realizations for service providers, while controlling costs, facilitating faster time-to-market

and improving satisfaction at the clients‟ end

Key Challenges

• Resource retention – Indian ITES sector has become an HR manager‟s nightmare.

• Unavailability of employable employees/ Lack of trained people- The supply and demand of

quality engineers who are capable of working in the ITES field is having a huge gap

• Economic slowdown – IT, ITES has its revenue stream linked to the western. A slow down

there would impact Indian ITES growth and it has been a concern with many companies.

• BPO exports expected to reach USD 16

billion in FY2012, growing by over 12 per

cent over FY2011

• Knowledge services segment growing in

significance; fastest growing among

BPO segments at over 15 per cent; has

pioneered outsourcing in areas such as

data analytics, data management and

legal services

• Data analytics is expected to grow 19 per

cent, much faster than BPO industry

average; key drivers include emergence

of analytic tools, rising volumes of data,

increased data-driven decision making

and emergence of on-demand models

• Domestic BPO segment is expected to

grow by 17 per cent in FY2012, to reach

`149 billion, driven by demand from

voice-based (including local language)

services and increasing adoption by both

traditional and emerging verticals,

including the government

Performance Highlights Information Technology Enabled Services

Sector Snapshot

Sources: Nasscom, Deloitte Reports


50.0% 50.0%

Annual Revenue wise Breakup

< 100 Cr. 100 - 300 Cr. 300 - 500 Cr.

500-1000 Cr. > 1000 Cr.

14.3%

14.3%

28.6%

14.3%

28.6%

Employee Strength

< 500 500 - 2000 2000 - 5000

5000 - 10000 10000 - 25000 > 25000


• Almost all the participants in the Information Technology Enabled Services (ITES) sector were organizations with an Annual

Revenue of between `100-500 Cr

• 57% of the participating organizations had an employee strength of between 2000-5000 and greater than 25000 employees


Participant Profile


• The median increment is expected to be 12% for the ITES

services, with majority of the organizations falling within the range

of 10 – 17%

• The range of increments does not vary much across management

levels


• Overall, we see Junior and Middle Management receiving greater

increments as compared to the other levels

• The median increment for junior and middle management levels

is higher at 12% & 13%, whereas senior and top management

have median increment of 11% and 10% respectively



The average increments paid out in the Information Technology Enabled Services Sector (12%), similar to that

of overall industry increment (12%)

Increment Range 2012-13

12.0% 13.0% 11.0% 10.0%

0%

10%

20%

30%

40%

50%

JM MM SM TM


JM 9.8% 10.0% 12.0% 15.5% 16.8%

MM 10.0% 10.5% 13.0% 14.8% 15.0%

SM 10.0% 10.0% 11.0% 12.8% 14.0%

TM 7.8% 8.5% 10.0% 10.0% 12.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 - 5 5 - 10 10 - 15 15 - 20 20 - 25 > 25

Perc

enta

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s

Range of Increments



JM

MM

SM

TM



a significant drop compared to last year‟s median (15.5%)

• The increments given at 50th, 75th & 90th percentile drop

markedly if compared with increments given out last year . 10th

& 25th percentile doesn‟t show any change

• Median for Top management has remained similar to last

year‟s figure (10%)


2011-12 9.8% 10.0% 15.5% 17.0% 18.0%

2012-13 9.8% 10.0% 12.0% 14.0% 15.0%



The average increments paid out in the Information Technology Enabled Services Sector (12%), similar to that

of cross sector increment (12%)

12.8%

15.5%

12.0%

10.0%

12.0% 13.0%

11.0% 10.0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

JM MM SM TM

2011-12 2012-13




• The industry overall median variable pay % is around 13.5%

• Senior and Top Management have received the highest variable

pay. At the Junior level, employees/sales staff have received

better increments as the variable pay component makes up a

lesser fraction of their pay; although, the variable pay range is

quite broad for senior management level


The variable pay is the highest for the Top management levels; Median variable pay % for Top Management

– 18.3%

• Majority of the companies gave their Senior Management

variable pay in the range of 10-22% but a large number were

concentrated from 15-20%

• Top Management has received varied Variable pay, however

the median is 18.3 %





JM 10.0% 10.0% 10.0% 10.0% 11.5%

MM 11.0% 12.5% 15.0% 17.5% 19.0%

SM 12.5% 15.5% 18.5% 20.0% 21.3%

TM 15.0% 15.0% 18.3% 21.8% 22.2%

10.0% 15.0%

18.5% 18.3%

0%

20%

40%

60%

80%

100%

120%

JM MM SM TM


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

< 10 10 - 20 20 - 30 30 - 50 50 - 80 > 80

Perc

enta

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panie

s




JM

MM

SM

TM


• The sector median for variable pay % is 13.5%

• Across all levels, Variable pay (%) median for Senior

Management is the maximum (18.5%) , followed by Top

Management (18.3%), and then Middle Management (15%)

• The Median Variable Pay as a percentage of Cost To

Company (CTC) has dropped significantly across levels


2011-12 8.2% 12.0% 14.2% 17.5% 23.4%

2012-13 12.0% 12.0% 13.5% 15.0% 15.0%


Variable Pay

The variable pay is the highest for the Top management levels

15% 20%

25% 28%

10.0% 15.0%

18.5% 18.3%

0%

10%

20%

30%

40%

50%


2011-12 2012-13

MM JM TM SM


• Hiring and Retaining employees is what is

plaguing the sector since the last few

years. Employee engagement is an

important area of focus with most

organizations investing in programs

targeting engagement levels

• To meet the hiring challenge, firms look

for graduates with good communication

skills, in large numbers, which poses a

challenge

• Employee engagement is an issue due to

odd working hours and monotonous work

• Retaining critical talent is a big challenge

in this sector as the employees switches

jobs frequently and also quits for further

studies

• The top focus areas recognized give a

clear road map as to the critical HR

challenges for the year which need to be

dedicatedly worked upon

Top 3 HR Challenges

1

Hiring Skilled Talent

2 Engaging People

3 Retaining Critical Talent


Personal Reasons

Better Pay

Pursue Further Studies



Headcount Reduction


• ITES industry faces the highest attrition

across sectors

• Better career opportunities, further studies,

personal reasons are the most wide-spread

and important reasons for attrition in this

sector

• As most of the workforce employed in this

sector is young, mostly graduates, most of

them do opt for higher education after a few

years in the industry, thus forming one of

the important reasons for attrition

• It is a highly competitive market with

organization recruiting is sizeable numbers.

The same is causing a war for talent and

impacting pay. Relatively young workforce

leaving organizations for marginal increase

in pay levels

• Among the above measures, Outsourcing/

Offshoring has come up as the way most

preferred by companies to optimize cost

• This is closely followed by Headcount

Reduction given the large numbers

employed by this sector. ITES being a

service based industry employs large

number of people, thus most companies

during crunch period look at Headcount

reduction as one of the most feasible

options

• Though Shared Service Centers and

Outsourcing involve significant initial

investment but they are investments which

save huge costs in the long run

1

2

3

1

2

3



Sector Analysis: Media & Advertisement


Industry Overview

• Television is gaining more popularity than any other media, particularly with satellite

and cable television making deeper inroads in semi-urban and rural markets; the

advertisement spends on TV are expected to grow at around 12-14%

• The quality of the advertisement campaigns has improved over the years and the ad

agencies have become stronger business houses with innovative creativity as their

prime USP

• The traditional print media in India is still playing steady - holding on in this new age of

digital content, and will see expected growth in 2012

• The horizontal expansion of the newspapers will continue to grow by way of additional

supplements to the dailies in the form of pull-outs on finance, health, real estate,

entertainment etc.

• Social networking have emerged as capable of rewarding media companies with new

avenues of revenue for those who dare to explore the intricate web and stay on-line

with the emerging trends on these networks

Media & Advertisement

Sector Snapshot

• The Media & Entertainment industry registered a growth of 12 per cent in

2011 over 2010; TV accounted for `329 billion of revenues in 2011 and is

estimated to grow at a CAGR of 17 per cent over 2011-16

• Growing regional markets are driving the pace of print media that registered

a growth of 10 per cent in 2010 and is expected to follow the similar pace till

2015

• Advertising spends across all media accounted for 41 per cent of the overall

M&E industry revenues, aggregating to `300 billion while advertising

revenues witnessed a growth of 13 per cent in 2011


Source: Deloitte TMT Predictions Report 2011 & 2012; IBEF report

67%

33%

< 100 Cr. 100 - 300 Cr.

300 - 500 Cr. > 500 Cr.

45%

44%

11%

< 500 500 - 2000

2000 - 5000 >5000

Participant Profile

Revenue wise Breakup

Employee Strength wise Breakup


• The annual increments announced for the sector in 2012-13

closely follow the industry trends

• The median increments paid out in the Media & Advertisement

sector in 2012-13 is 11%; a 1% points increase over last year

across levels

• The spread of the increment pay range has decreased as

compared to last year, with the highest increment paid out at

20% to the junior management level and the lowest increment of

5% announced at top management level



Annual Increments

Increment Range Increment Percentiles


2011-12 5.0% 10.3% 10.0% 15.0% 15.9%

2012-13 8.0% 10.0% 11.0% 15.0% 15.4% 15.0% 15.0%

12.5% 12.5%

0%

10%

20%

30%

40%

50%

JM MM SM TM16.4%

16.0%

15.0% 15.0%

15.0% 15.0%

12.5% 12.5%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

JM MM SM TM

2011-12 2012-13

Median Increments across Levels

The median increments paid out in the sector in 2012-13 is 11%; comparable to the cross sector trends



• The median variable pay for the sector is relatively low at

10.5% of CTC as compared to cross sector median pay of

16.2% of CTC

• The highest payout is expected to be at 38% at the Top

management level; few participants do not have variable pay

as a practice at junior management levels

• The variable pay across levels for the sector have shown

marginal or no change over last year



Variable Pay

Variable Pay (as % of CTC) Range Variable Pay Percentiles


2011-12 3.0% 5.0% 11.0% 16.0% 20.0%

2012-13 5.0% 7.5% 10.5% 14.0% 21.2%

3.5%

9.0% 10.0%

15.0%

2.5% 7.0%

10.0%

15.0%

0%

10%

20%

30%

40%

50%

JM MM SM TM


2011-12 2012-13

2.5% 7.0% 10.0%

15.0%

0%

20%

40%

60%

80%

100%

120%

JM MM SM TM

The median variable pay for the sector is relatively low when compared to cross sector median pay; a

considerable 5.5% points difference


Sector Analysis Energy


Industry Overview

• India is the 5th largest consumer of energy in the world and is expected to rise to 3rd

by 2030

• Coal and Oil make up two-thirds of the total energy use in India

• Various policies brought in by the Government to encourage further investment

across the sector such as the New Exploration Licensing Policy (NELP) and Coal Bed

Methane (CBM) Policy

• India already has the world‟s fifth-largest wind power capacity, and the country is the

fifth-biggest market for wind-energy generation equipment in Asia. The sector is

expected to continue to expand

Key Challenges

• Power shortages and grid failures expected to remain common. Inadequate access to

energy of all kinds continue to hold back economic growth

• Pricing structure for power is unbalanced, leading to State Electricity Boards going

bankrupt – deterring increased investment from private sector when substantial

investments are actually needed

Energy

Sector Snapshot

• The petroleum and natural gas industry in India has attracted foreign

direct investment (FDI) worth USD 3,332.78 million during April 2000 to

December 2011

• Energy consumption in India to rise by an average of 5% a year during

2012-16 – a forecast of a slow growth rate for the industry. Consumption

of Natural Gas to grow faster than that of Oil


Source: IBEF; Department of Industrial Policy & Promotion (DIPP); Economist Intelligence Unit

Participant Profile

Revenue wise Breakup

Employee Strength wise Breakup

40%

60%

< 100 Cr. > 1000 Cr.

34%

33%

33%

< 500 500 - 2000 2000 - 5000

Undisclosed

participants - 2

Undisclosed

participants - 1


• The median increments in this sector are at 13.8%

• The increments follow a general trend line of being higher for

Junior management and progressively becoming lower till Top

Management

• The spread of increments is greatest at Junior management level

• There is not much of a difference between increment levels

between last year and this year – indicating that the sector has

not faced much turbulence or exponential growth either


Energy

Annual Increments

Increment Range Increment Percentiles


2011-12 8.5% 12.3% 13.4% 13.8% 14.8%

2012-13 8.5% 12.4% 13.8% 14.0% 15.0%

12.5% 12.5% 12.5% 10.5%

0%

10%

20%

30%

40%

50%

JM MM SM TM

14.0% 14.0%

12.8%

10.7%

12.5% 12.5% 12.5%

10.5%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

JM MM SM TM

2011-12 2012-13


Increment median for sector higher than cross-sector median; not very different from the previous year



• Variable pay % median for the sector is at 13.3%

• This is lower than the overall cross-sector median. However,

variable pay % has increased marginally at the 75th and 90th

percentiles

• Across levels, the variable pay % for Junior and Middle

management has increased

• For Top Management, this has reduced. This may be due to

slightly slower growth rates – a factor that has been forecasted to

continue in the coming years – leading to organizations

performing around or just below average levels


Energy

Variable Pay

Variable Pay (as % of CTC) Range Variable Pay Percentiles


2011-12 7% 11% 12.5% 15% 18%

2012-13 8.7% 10.8% 13.3% 15.9% 18.4%

12.3% 13.3% 14.8% 17.3%

0%

20%

40%

60%

80%

100%

120%

JM MM SM TM

7.6%

10.5%

15.0%

22.5%

12.3% 13.3% 14.8%

17.3%

0%

10%

20%

30%

40%

50%

JM MM SM TM


2011-12 2012-13

Variable Pay has been conservative; has increased for Junior Management and reduced for Top Management



Contents

Survey Highlights

Survey Details



Participant List


PARTICIPANTS‟ LIST

Serial No. Company

1 AAPC India Hotel Management Pvt.Ltd.

2 Accenture Services Pvt. Ltd.

3 Acnielsen Org-Marg Pvt.Ltd.

4 Aditi Technologies

5 Aditya Birla Finance Ltd.

6 Aditya Birla Retail Ltd.

7 Agfa India Pvt. Ltd.

8 Air Liquide Engineering India Pvt. Ltd.

9 Alere Medical Pvt.Ltd.

10 Aliens Group

11 Anand Rathi Group

12 Arvind Brands Limited

13 Ashiana Housing

14 Atlas Copco (India) Ltd.

Note: Six company names have not been disclosed based on client request

Serial No. Company

15 Axis Bank

16 B. Braun Medical India Pvt. Ltd.

17 Bangalore International Airport Limited

18 BASF India Limited

19 Bharti Walmart Private Limited

20 Binani Group

21 Biocon Ltd.

22 Bosch Limited

23 Brics Securities Limited

24 Cambridge Solutions Ltd.

25 Castrol India Ltd.

26 Clariant Chemicals (India) Limited

27 Continental Engines Limited

28 Cosmo Films Ltd.



Serial No. Company

29 CRI Pumps Private Ltd.

30 Crimson Logic India Pvt. Ltd.

31 DDB Mudra Group

32 Deloitte Consulting India Pvt. Ltd.

33 Deutsche Bank (India)

34 DLF Pramerica Life Insurance Company Limited

35 Dr. Reddy's Laboratories (Pvt) Limited.

36 Emami Limited

37 Experian Credit Information Company of India Private

Limited

38 Fidelity Business Services India Private Limited

39 Financial Information Network & Operations Ltd.

40 Firstsource Solutions Limited

41 Fortune Financial Services(Ind) Ltd.

42 Fresh & Honest Café Ltd.


Serial No. Company

43 Fullerton India Credit Company Limited

44 Future Generali India Life Insurance Co. Ltd.

45 Geojit BNP Paribas Financial Services Limited

46 GMR Group

47 Godrej & Boyce Manufacturing Company Limited

48 Grail Research

49 Grand Hyatt

50 Gujarat Heavy Chemicals Limited

51 Gupta Energy Private Ltd.

52 Gupta Global Resources Ltd.

53 Gupta Infrastructure India Pvt. Ltd.

54 GVK Power & Infrastructure Limited

55 HDB Financial Services Ltd

56 HDFC Bank Ltd.



Serial No. Company

57 HDFC Standard Life Insurance Company Limited

58 Huntsman International (India) Private Ltd.

59 iGATE Patni

60 IL&FS Investment Managers Limited

61 Indraprastha Gas Limited

62 IndusInd Bank Limited

63 ING Vysya Bank Ltd.

64 Ingenero Technologies (India) Pvt. Ltd.

65 International Asset Reconstruction Company Private

Limited

66 International Speciality Products (india) Pvt. Ltd.

67 Kansai Nerolac paints Ltd.

68 Kodak India Pvt. Ltd.

69 Kongsberg Maritime India Private Limited

70 L&T Finance Limited


Serial No. Company

71 L&T General Insurance Co. Ltd.

72 Leo Burnett

73 Lloyd's Register Asia

74 Lodha Group

75 Lonza India Pvt. Ltd.

76 LOREAL India Pvt. Ltd.

77 LT Foods Ltd.

78 Lupin Ltd.

79 Magma Fincorp Limited

80 Mahindra & Mahindra Financial Services Limited

81 Mahindra Holidays & Resorts India Ltd.

82 Marathon Realty Pvt. Ltd.

83 Marks and Spencer (India)

84 Mecklai Financial Services Ltd.



Serial No. Company

85 Mercator Ltd.

86 Merck Limited

87 Metro Shoes Ltd.

88 Micro Turners I

89 Mizuho Corporate Bank Ltd.

90 Moser Baer India Ltd.

91 MSPL Limited

92 Mumbai International Airport Pvt. Ltd.

93 Nashik Vintners Pvt. Ltd.

94 NIIT Technologies Ltd.

95 Orchid Chemicals & Pharmaceuticals Ltd.

96 Pearson Education (India)

97 Pfizer India Ltd.

98 Pitti Laminations


Serial No. Company

99 Polyplex Corporation Ltd.

100 Promed Exports Pvt. Ltd.

101 Quatrro Global Services Pvt. Ltd.

102 Rane Group

103 Royal Bank of Scotland

104 S M Creative Electronics Ltd.

105 Samsonite South Asia Pvt. Ltd.

106 Shapoorji Pallonji Group

107 Sharekhan

108 SKF India Limited

109 SMC Investments and Advisors Limited

110 Star India Private Limited

111 Stock Holding Corporation of India Ltd

112 Super Religare Laboratories Limited



Serial No. Company

113 Sweta Estates Pvt. Ltd.

114 Syntel Limited

115 Synthite Industries Ltd.

116 Tahiliani Designs Pvt. Ltd.

117 Talisma Corporation Pvt. Ltd.

118 Tata Capital Ltd.

119 Tata Chemicals Ltd.

120 Tata Consultancy Services

121 Tata Housing Development Company Ltd.

122 Tata Power Company

123 Tata Services

124 TCS E-Serve Limited

125 The Great Eastern Shipping Company Limited

126 The Himalaya Drug Company


Serial No. Company

127 Theorem Clinical Research

128 ThoughtWorks Technologies (India) Pvt Ltd.

129 V.I.P. Industries Limited

130 Vestas Wind Technology India Private Limited

131 Voltas Limited

132 Welpsun India Ltd.

133 Willis Processing Services (India) Pvt. Ltd.

134 Wipro Technologies

135 XLHealth Corporation India Private Limited

136 Zenta India Private Limited

96


Key Contacts

Indrani Haldar

Consultant


Board: + 91 22 6619 8600, Mobile: +91 96191 57525

Email – [email protected]

Mumal Singh

Consultant


Board: + 91 22 6619 8600, Mobile: +91 99302 19183


Gaurav Warudi

Consultant


Board: + 91 22 6619 8600, Mobile: +91 98605 84841


Dr. Vishalli S Dongrie

Senior Director


Direct: +91 22 6619 8832, Mobile: +91 98339 73458


Priyanka Taranekar

Manager


Direct: + 91 22 6619 8813, Mobile: +91 98673 05893


Roy Lobo

Senior Consultant


Direct: + 91 22 6619 8656, Mobile: +91 99209 14729


Pooja Karopady

Senior Consultant


Board: + 91 22 6619 8600, Mobile: +91 98196 18761


P Thiruvengadam

National Practice Leader


Direct: +91 80 6627 6108


mailto:[email protected]








©2012 Deloitte Touche Tohmatsu India Private Limited

.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent

entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.

This material and the information contained herein prepared by Deloitte Touche Tohmatsu India Private Limited (DTTIPL) is intended to provide general information on a particular subject or subjects and is not

an exhaustive treatment of such subject(s). None of DTTIPL, Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte Network”) is, by means of this material,

rendering professional advice or services. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any

action that might affect your personal finances or business, you should consult a qualified professional adviser.

No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this material.

©2012 Deloitte Touche Tohmatsu India Private Limited. Member of Deloitte Touche Tohmatsu Limited. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by

guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche

Tohmatsu Limited and its member firms.

This material and the information contained herein prepared by Deloitte Touche Tohmatsu India Private Limited (DTTIPL) is intended to provide general information on a particular subject or subjects and is not

an exhaustive treatment of such subject(s). None of DTTIPL, Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte Network”) is, by means of this material,

rendering professional advice or services. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any

action that might affect your personal finances or business, you should consult a qualified professional adviser.

No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this material.

©2012 Deloitte Touche Tohmatsu India Private Limited. Member of Deloitte Touche Tohmatsu Limited.

http://www.deloitte.com/about





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