One of the primary reasons why salaries are on the increase is attributed to the global pandemic.
New ways of working post-Covid has broadened the talent pool
The world has moved to remote working in response to the outbreak of Covid19. And as a consequence, in India, individuals now increasingly have the opportunity to apply for roles in parts of the country that would not have been feasible pre-2020.
Historically, family ties in India are strong, and anecdotally, contacts in India tell us that prior to the pandemic many workers wouldn’t have considered relocating from their family city to change job. Remote working has enabled workers to put their career first without having to compromise on location. As a result, companies who would previously have competed with comparable companies across the city for labour, are now also contending with companies across India to secure the best talent.
Many organisations are finding that as the talent pool has opened, to attract high-calibre applicants, salaries have had to rise. Evidence from CareerNet suggests that Hyderabad, Bangalore, Delhi/NCR and Mumbai are the top four cities with the highest hikes in salaries in 2021 (Goel, 2021). They found that the salary increases have been greatest within domestic employers – average salaries have gone up by 34% and 36% for entry level and middle level candidates, whilst the global market recorded only 17% and 15% hikes in comparison (Goel, 2021).
Remote working is preferred, and therefore increasingly likely to become the norm post-pandemic
Remote working is also being driven by behavioural preferences. A study by Gartner, released this month, revealed that contrary to their counterparts in China and Japan, Indian hybrid workers reported that they prefer virtual meetings over in-person meetings (Sakpal, 2021). Kotipalli, principal research analyst at Gartner, said “Virtual meetings has always been desired by Indian workers. During the pandemic, Indian workers experienced first-hand the flexibility benefits they can reap out of virtual meetings, and now this has become their preferred choice.” (Sakpal, 2021)
Not only that, but the study revealed that 50% of Indian hybrid workers considered themselves to be more productive when working remotely, with choice of location and flexibility of working hours cited as the top enablers for productivity (Sakpal, 2021).
It can be argued that the evidence suggests that the pandemic has irreversibly changed working patterns and behaviours across India. In summary, remote working has increased choice and opportunity for workers in India, who have embraced, and prefer this approach. A nationwide talent pool has opened up to organisations, but to attract the best candidates has come at a price.