Uncertain economic scenario: Employees brace for a dip in year-end variable pay

 

 MUMBAI: Employees across sectors are keeping their fingers crossed on the year-end variable pay in an uncertain economic scenario.

"It is still early to say, but sentiments right now are negative and if this continues, companies will review their forecasts. But then they also need to retain talent," says Thiruvengadam P, senior director, human capital advisory, Deloitte in India.

Even so, companies are not sending out warning signals yet. "Philips India is on track," says human resources and global chief learning officer Yashwant Mahadik, adding that variable pay for 2014 may take a hit at FMCG firms if the economy continues this way. Deferments, too, are largely ruled out but consulting companies and a few professional services firms may look at payments in tranches.

Employees in relatively better-performing sectors like pharmaceuticals and oil and gas will not take a huge hit. Manufacturing and service sectors, however, could see a smaller percentage of variable pay than the comparable period last year. The HSBC/Markit purchasing managers index for India's manufacturing industry contracted for the first time in over four-and-a-half years to 48.5 in August.

 Bishwa Srivastava

PGDM 3RD SEM

IIMT COLLEGE OF MANAGEMENT