The high inflation, economic slowdown and liquidity crunch are compelling companies to offer deferred salary packages to their employees. Headhunting firms have reported moves by companies to make salary payments in parts or divisions (say, 60% in the first six months, 20% in the next three months and 20% at the end of the last three months).
Says Arunima Sehgal, head-executive research, INX executive search Pvt. Ltd, ?Currently, this move is seen in firms that have just started their operations in India and in small firms that are expanding. However, if the slowdown continues, then there is a possibility of this practice spreading across sectors.?
According to experts, the sectors among the worst hit are real estate, retail and financial services.
Talking to FE, Rajiv Phadke, executive director-HR and corporate communications, Angel Broking, said, ?This is not completely a new practice in India. This was prevailing earlier also, as this includes performance and retention elements in it. However, we don?t follow this practice on a national basis.?
It is observed that the C2C (cost to company) package for employees have not declined in the past six months, but companies are being watchful, as the flavour of the few sectors have started changing.
?The cash flow of companies is getting a hit; there is liquidity crunch; interest rates are getting higher; and all this is resulting in companies thinking about how to deal with the salary pay (especially at the top level), which is at an all time high,? says Tapesh Sengupta, MD of CHR Global HR Consultancy.
The salary package at the CEO level in a financial services sector is anywhere between Rs 1 crore and Rs 4-5 crore, so is it in real estate.