Firms are rethinking their compensation structures and benefits packages to retain high-performing employees.
Although attrition rates have been plateauing across India Inc, companies are re-evaluating variable pay, incorporating more long-term incentives, and offering skilling initiatives in a bid to reduce costs.
While Japanese tyre manufacturer Yokohama Rubber Co. has discontinued variable pay at the entry levels, firms in other sectors have removed the parameter of the organisation’s success in the variable pay of their younger workforce, the article says. Startups, on the other hand, are offering more stock options and other long-term incentives rather than cash bonuses, the article says.
Amid wage costs as a share of revenue rising for IT giants like TCS, Wipro, and HCLTech in the first quarter of FY24, hikes have been lowered and variable payouts reduced. But there is greater focus on learning and skilling programmes in AI/ML to address attrition, the article further says.
Promotion cycles are also increasingly being based on the growth of high-performing employees rather than tenure of service, but attrition at the junior levels continues to be a challenge