According to Ministry of Statistics and Programme Implementation(MoSPI), the inflation in the food basket has spiked to 5.85 per cent. The average price of oils and fats climbed 16.44 per cent while vegetable prices saw a rise of 6.13 per cent and confectionery and sugar grew 5.41 per cent.
With high attrition rates and rising demand for good talent, employers need to steel themselves for appraisal requests from employees looking to keep up with the surging cost of living. Organizations therefore need to re-evaluate their appraisal models with a focus on talent retention through rewards. UK based fintech, Tide which launched its operations in India in 2020 has come up with strategies to offer pay bumps commensurate with inflation. FinancialExpress.com caught up with Ravi Maithani, Head of People and Culture, Tide to understand this. Excerpts:
How do you evaluate the employees’ performance and how does Tide’s inflation based appraisal work?
Our appraisal and salary increase model has been adapted to ensure we are taking inflation into account, which is one of the biggest financial challenges faced by people across the globe. We measure the rate of inflation using the Consumer Price Index (CPI) in each of our locations to understand the purchasing power and use that as a benchmark for salary increases. Considering that the impact of inflation varies across geographies, we also factor this in, along with industry standard benchmarking, for employees to feel more secure about their pay in the longer run.
This means that everyone who has been at Tide for 9+ months receives an inflation increase based on their location, in addition to a performance increase, which could be as high as 9% on top. Some folks in India will be receiving ~15% increases if they are top performers or even higher, if the market benchmarks have changed.
What were the key factors that led you to curate this inflation-based appraisal model?
The People team at Tide conducted a thorough study of salary trends across markets, job levels as well as competitors. Typically, compensation packages encompass basic salary, paid time off, parental leave and sick leave. Most employers do not directly take into consideration the inflation rate, which is a common point of concern for employees. Also, owing to the ‘great resignation’ and the shortage of good talent, today most companies are raising the benchmark and hiring at an increased salary. Additionally, an appraisal model where salaries are matched/adjusted to cover the rate of inflation in respective locations, contributes significantly in retaining talent and treating them fairly.
This brings us to another very important point, which is, in most organisations the longer serving employees are usually at a lower salary base than new joiners, who often start with a higher salary. Moreover, there is always an additional cost of replacing existing talent and training new employees. Our inflation-based benchmarking model helps us offer CPI-based increment to our employees and also helps set a culture that reinforces we value our people for their contribution and want to retain them.
What kind of appraisal trends do you see evolving in your industry this season?
One factor, which is bound to set new trends in this space, is that companies can no longer wait for a year to look at salary benchmarks as the market is changing so rapidly. Organisations will have to follow market benchmarks closely and look to make mid-year adjustments. They will also have to be more responsive to the demand and supply gap.
Another prominent trend that we have invested in, is developing people and supporting Tideans to shape their careers. One such example is career switching and cross-team opportunities within Tide, with many Tideans having long and varied careers within the company. As a result of this, some Tideans have worked across 2-3 different roles within the organisation and have thus moved closer to their career goals while being at Tide.
How do you see such practices impacting employee attrition and overall growth and recovery of businesses post pandemic?
Firstly, the fact that there is transparency across the business, with decisions in relation to business strategy, benefits and remuneration being communicated clearly to all, helps foster a positive culture. Moreover, opportunities for promotion and growth are offered twice per year, rather than just once. At Tide, we believe that retaining employees is as important as hiring new ones. In fact, the benchmarking process as well as the CPI-linked appraisal is to reward existing employees for their contribution.
As mentioned earlier, new employees tend to join at higher salaries, while existing employees’ salaries can be slower to catch up. At Tide, that’s not the case. This helps us build a robust team, as well as achieve overall growth. Making up for the loss of an employee usually costs an organisation 3 times more than retaining one, moreover it also costs us valuable time that we can use to scale up.
What kind of impact did the pandemic have on Tide’s people piece?
We have all learnt our own set of lessons through this pandemic, one of the most important being that it has brought a paradigm shift from ‘one size fits all’ to people-centric policies and adopting a need-driven approach. As a people-centric organisation, Tide has made flexible and hybrid working a norm rather than an option, while working from home is the default for many people, the office is offered as a benefit.
At Tide, work-life balance is a high priority and Tideans are empowered to work wherever it suits them best. Social and cultural activities, team lunches and fun and games are on offer in the office and remotely as well. Tide also encourages autonomy and a ‘test and learn’ attitude, with all individual Tideans being able to make an impact.
The pandemic has made us all rethink the need for physical presence, especially when it comes to employee performance. Hence, we at Tide, have identified roles that can be fully-remote; which also allows us to tap talent from across geographies. This has led to us shifting our focus to more self-managed, high integrity candidates. It has become imperative to look for candidates that don’t just resonate with the values of the organisation, but those who constantly work towards upholding them.
What are your plans for hiring in respective geographies for FY22? What are some in-demand skills?
Last year we announced our plans of creating 1000 jobs in India by 2026, out of which 60% will be tech roles. In the coming 18-24 months, our Hyderabad technology centre/global development centre (GDC) will onboard more than 300 engineers across various roles, with a particular focus on backend engineers in Java and Python, as well as experts in data science and Flutter.