Salary level in certain sectors are expected to be restored to the pre-pandemic mark by the end of this financial year aided by the recovery in economic activities, according to TeamLease HRTech CEO Sumit Sabharwal said.
Hit by the pandemic, organisations across sectors resorted to pay cuts and layoffs to reduce their labour costs, Sabharwal told PTI.
“After analysis of data from our client base, we found that the workers in the formal sector witnessed a 3.6 per cent wage cut while informal workers experienced a much sharper fall at 22.6 per cent. The pandemic has shown us the importance of the format sector in the economy,” he noted.
He said, as normalcy returned and the economy gradually recovered companies began giving increments that helped in narrowing the salary gap to the 2019 level.
However, there is still a little gap of around 7-14 per cent from the 2019 wage level in certain sectors. “We expect the recovery to reach the 2019 level by the end of this financial year,” he added.
Further, Sabharwal noted that large and traditional businesses in sectors such as banking, ecommerce, education, information technology and telecommunication witnessed an average annual increment in the range of 5-12 per cent.
“Talent retention amid high attrition, recovery in businesses, and easing concerns about Covid-19 disruptions are some of the factors making companies handsomely reward their employees,” Sabharwal noted.
Sectors such as automobiles, hospitality, BPO, ITES, construction and real estate were the worst affected by the disruptions during the Covid-19, witnessing layoffs and huge salary cuts of up to 28 per cent during the pandemic.
While sectors like tech start-ups, ed-tech, online retail and logistics not only remained untouched by the pandemic they even witnessed a boom resulting in a high rate of hiring as well as increments, he said.
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