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Auto staff may see another year of double-digit hikes

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India’s automotive sector employers are likely to offer double-digit pay increases in 2024, according to a new study, continuing the uptrend of the previous years as they seek to retain good talent.

The pay rise is likely to be 10.5% on average for staff of automotive producers and 10% for those working for suppliers, according to Deloitte’s Increment and Attrition Trends Study, which the company shared exclusively with ET.

This is in line with the trend of the previous few years and higher than the India Inc average of more than 9% expected this year, which ET had reported earlier.

“The past three years have witnessed double-digit hikes for the automotive industry, especially the producers,” said Neelesh Gupta, director, Deloitte India. Barring 2020, Covid-19 impact, 2021, ’22 and ’23 have seen over 10% hikes, Gupta said.

Auto staff may see another year of double-digit hikes

Reasons: High attrition faced by the sector and increasing focus on electric vehicles.

The auto sector executives ET spoke with confirmed the trend.

“Average salary hike for our workforce (over 5,000 employees) is expected to hover around 10%,” said Amit Sharma, business HR head at International Tractors Limited.

Sharma indicated that the robust performance of the auto industry has led to significant talent movement across the passenger vehicle, commercial vehicle and tractor segments.

“This is why organisations are offering substantial salary hikes while they foresee continued momentum in the market,” said Sharma.

Sarma Chillara, HR head of Škoda Auto Volkswagen India, said, “For 2024, we plan for an overall salary hike of approximately 10%, which is similar to what we have paid last year.”

Skoda has a policy of differentiating the salary and rewards of top talent or top performers. “We do pay them on the higher side as compared to the rest of the employees to acknowledge and appreciate their good performance and contributions,” said Chillara.

This year, Hyundai Motor India Limited (HMIL), too, will recognise its top performers, who make up 20% of the workforce, distinguishably this year, according to Charles JS Walter, AVP and vertical head – human resources.

“On the back of a strong 2023, pay hikes would reflect holistic performance and growth visualisation, keeping business imperatives pivotal,” said Walter.

A spokesperson for Mercedes Benz India said, “We separate company performance and individual performances. We think merit increase is just one avenue of rewarding individual performance. Job rotation, professional enrichment, training at pedigree institutes, international exposure and mentoring/coaching are essential to an employee’s development.”

According to Deloitte, the salary increase for top performers or top talent may even be double (21%) of the average increase.

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