Compensation Trends Survey 2012

Compensation Trends Survey 2012
Deloitte
Human Capital Advisory Services
April 2012
Contents
Survey Details
Survey Highlights
Overall Industry Analysis
Detailed Sectoral Analysis
Participant List
2012 Deloitte Touche Tohmatsu India Private Limited
Survey Details
Scope of the Survey
The Compensation
Trends Study is an
Annual Study,
conducted by
Deloitte Human
Capital Advisory
Services, of the
Indian Market on
areas that need
benchmark
information. This is
the second year this
study is being
conducted in India
Elements detailed in the Compensation Trends

Survey 2012 - 13
Salary Increase for 2012 2013

Variable Pay given / to be given for 2012 - 2013
Attrition rate and key reasons for attrition faced by organizations
Key Human Resource Challenges faced by organizations
Cost optimization measures undertaken by organizations
Survey Details
Survey Methodology
The
parameters of
the study were
finalized and a
structured
questionnaire
was designed
to be used as
a primary data
collection tool
Design the
survey
instrument
Finalization of
Target Basket
The sectors
covered in the
study were
finalized along
with the leading
organizations
from each
sector
A formal
invitation e-mail
was sent to the
Human
Resources in
the chosen
organizations
requesting for
participation
Invite and seek
consent for
participation
Data Collection &

Validation
The response
received from
all participants
was validated
and checked
for accuracy
and intended
interpretation
The data
received was
collated and
analyzed to get
detailed
insights on
sector wise
practices and
compensation
trends
2012 13
Compensation
Trends Survey
Report
Analysis
Survey Details
Participant Profile
Industry-wise participation
Consumer Business & Retail
7.4%
8.5%
Energy & Resources

4.4%
10.6%
Financial Services
Information Technology
5.6%
23.2%
Enabled Services
Infrastructure & Real Estate
Manufacturing
19.0%
Media & Advertising

7.0%
9.2%
4.9%
Pharmaceuticals, HealthCare &

LifeSciences
Other(s)
142 organizations participated in the Compensation Trends Survey for 2012 2013
Survey Details
Participant Profile
Employee Strength
Gross Revenue
12.2%
24.2%
13.4%
40.2%
48.4%
9.9%
17.6%
34.1%
500 - 2000
2000 - 5000
5000 - 10000
Undisclosed participants: 16
10000 - 25000
100 - 300 Cr.
300 - 500 Cr.
500-1000 Cr.
> 1000 Cr.
Undisclosed participants: 36
Majority of the organizations (~75%) who participated in the survey have employees between 500 5000
Highest employee strength was observed in the Manufacturing sector (26%) and Financial Services (18%)
Gross revenue of majority of the organizations (~50%) is over `1000 crores
Majority of the large revenue generating organizations were in the Manufacturing sector (36%) and Financial
Services sector (18%)
Contents
Survey Details
Survey Highlights
Participant List
Survey Highlights
Executive Summary
Overall median salary increase across sectors is 12%
Manufacturing and Infrastructure & Real Estate sector have reported highest increment figures for 2012 2013
at 15%
Financial Services sector has been most conservative in increment projection for 2012 2013 at 10%
Overall Variable Pay (as a % of CTC) across sectors is 16 %. The frequency of payout is annual for the
majority of companies. However for sales staff, the payout is observed to be monthly or quarterly, depending
on organization compensation policy
Sectors which have registered highest attrition are ITeS, Pharmaceuticals, Healthcare & Life Sciences and
Media & Advertising and the sectors which have registered lowest attrition are Manufacturing and Energy &
Resources
The overall attrition across industries is 13%. Better Pay and Personal Reasons have been rated as the key
reasons for attrition industry-wide
Hiring and Retaining skilled talent continues to remain a key challenge in the market
Organizations are also keenly adopting cost optimization measures. Offshoring / Outsourcing of activities has
been rated highest amongst measures adopted. Interestingly employers are not keen on reducing spend on
Recognition Programs' or Training programs
Contents
Survey Details
Survey Highlights
Participant List

Market Overview
The Indian economy faced twin macroeconomic challenges of managing growth and containing inflation during the
fiscal 2011-12 against a backdrop of an uncertain global environment
In response to global economic issues such as Eurozone crisis and rising commodity prices, fiscal year 2011 2012 saw the Indian economy slow down
Policymakers struggled to strike a balance between inflation and growth. Domestic growth rate was impacted by
tightening of the monetary policy by RBI and geopolitical concerns
India has strong growth fundamentals but faces challenges in the form of a volatile global market coupled with
issues of fiscal consolidation and inflation. Upside risks to inflation expected from fiscal slippage, currency
depreciation and commodity shocks
The budget pegged Gross Domestic Product (GDP) for the year 2011-12 to have grown at 6.9% primarily due to
deceleration in industrial growth. The estimated GDP growth in 2012-13 is at 7.6%
The Wholesale Price Index (WPI) inflation for all commodities for the period of March 2011 to January 2012
moderated to 6.6 per cent**
Inflation in Consumer Price Index for Industrial Workers (CPI-IW) was 5.32 per cent in January 2012**
A slowing global economy continues to have an impact on the Indian Economy. According to the RBI, the world
economy may observe a decline in its growth trajectory although it is not slated for another recession
Source: ** Economic Survey 2011 2012

Deloitte Budget Publication
10

Annual Increment Trends
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
16%
12%
11%
Information
Technology
15% 15%
12%
15%
12% 12%
13%
12%
13%
12%
13%
14%
10%
Information
Technology
Enabled
Services
Infrastructure & Pharmaceuticals,

Real Estate
HealthCare &
LifeSciences
2011-12
Consumer
Business &
Retail
Financial
Services
10%
Manufacturing
Energy &
Resources
11%
Media &
Advertising
13% 12%
Other(s)
2012-13
Annual median increment for 2012 2013 across all sectors is 12%
Manufacturing and Infrastructure sector has the highest increment figures at 15% and Financial Services sector
has the lowest increment figure at 10%
Financial services sector maintains a conservative estimate given the overall mood of the economy
Manufacturing and Energy & Resources have marginally higher increments as compared to last year
Infrastructure & Real Estate, Pharmaceutical and Healthcare & Life Sciences have reported the same increment
figures as last year
ITeS sector has seen the steepest drop in salary projections despite the attrition challenge faced by the industry
Interestingly, in most organizations employers are aware that most employees leave for better pay elsewhere
however they have either the same increment or lower increments as compared to last year
11

Annual Increment 2012-13
Increments are expected to be conservative, attributable to the overall economic conditions
Increment Percentiles
10th
25th
50th
75th
90th
JM
10.0%
10.0%
12.0%
15.0%
15.0%
MM
9.0%
10.0%
12.0%
14.6%
15.5%
SM
7.6%
10.0%
11.0%
13.8%
15.0%
TM
7.5%
9.8%
10.0%
12.6%
15.3%
The 12% increment is almost standard across the cadres

with a few organizations giving lower increments to the
Senior and Top Management level
Majority of the sector companies have given increments to all
their employees in the range of 10-15%, across all levels
Junior, Middle, Senior & Top Management
Increment Range
50%
40%
Level-wise frequency distribution

100%
20%
90%
12%
12%
10%
11%
10%
0%
JM
MM
SM
TM
Top Max; Bar Median; Bottom - Min
The Increment Range is wider at top management levels

as compared to junior levels
Percentage of Companies
30%
80%
70%
60%
JM
50%
MM
40%
SM
30%
TM
20%
10%
0%
0-5
5 - 10
10 - 15
15 - 20
20 - 25
> 25
Range of Increments
Please Note: JM Junior Management; MM Middle Management; SM Senior Management; TM Top Management
12

Increments are expected to be conservative, attributable to the overall economic conditions
10th Percentile
25th Percentile
Median
75th Percentile
90th Percentile
2011-12
10.0%
11.0%
13.0%
15.0%
17.0%
2012-13
9.0%
10.0%
12.0%
14.1%
15.1%
Median Increment Across Levels
Increment figures were conservative as compared to last

year with a marginal drop across all percentiles
20%
18%
The overall median has dropped one percentage point to

12%
16%
14%
12.0%
12.3%
12.5%
12%
11.2%
10%
12.0%
12.0%
10.0%
11.0%
8%
6%
Median annual increment percentages dropped across

levels; the reduction is highest at top management levels
by nearly 1.2% points
4%
2%
0%
JM
MM
2011-12
SM
TM
2012-13
13

Annual Variable Pay Trends
25%
22%
20%
20%
18%
15% 15%
15%
14% 14%
15% 15%
17%
20%
18%
15%
13%
13%
13%
11% 11%
10%
5%
0%
Information
Technology
Information
Technology
Enabled Services
Infrastructure &
Real Estate
Pharmaceuticals,
Consumer
Financial Services
HealthCare &
Business & Retail
LifeSciences
2011-12
Manufacturing
Energy &
Resources
Media &
Advertising
2012-13
The average Variable Pay across all industries is 16%

Variable Pay across industries has mostly remained the same or reduced as compared to last year
The exception to this is the Manufacturing sector where the Variable Pay has significantly increased
Information Technology, ITeS, Energy & Resources, Infrastructure & Real Estate and Media & Advertising are paying the same
Variable Pay at median levels in 2012 as they did in 2011
Consumer Business & Retail has shown a marginal increase in Variable Pay as compared to last year
In the Financial services sector, there is a clear indication of companies moving to a more Fixed Pay structure with less
dependence on the Variable Pay
14

Variable Pay 2012-13
Trend shows overall decrease in Variable pay across industries
Variable Pay Percentiles
10th
25th
50th
75th
90th
JM
10.0%
10.0%
14.0%
20.0%
25.0%
MM
10.0%
12.8%
15.1%
20.0%
28.4%
SM
10.0%
15.0%
20.0%
25.0%
30.0%
TM
14.6%
20.0%
22.5%
30.0%
35.0%
In a growing economy, the role of Senior and Top management

is pivotal in the growth of organizations. This is reflected in the
Variable Pay structure of their compensation
Variable Pay is lower at the Middle and Junior Management
levels. At these levels, a higher emphasis is laid on the unit and
team level performances for disbursal of variable pay. The
compensation at these levels is driven by a higher Fixed
Compensation
Variable Pay (as % of CTC) Range

120%
100%
80%
100%
60%
90%
40%
20%
20%
15%
14%
0%
JM
MM
SM
TM
% of Companies
80%
23%
70%
60%
JM
50%
MM
40%
SM
30%
TM
20%
Majority of the companies gave variable pay in the range of 1030%; with few exceptions
10%
0%
< 10
The spread in the variable pay range is seen highest at the

middle and senior management levels
10 - 20 20 - 30 30 - 50 50 - 80
> 80
Range of Variable Pay
15

Variable Pay Trends
Trend shows overall decrease in Variable pay across industries
10th Percentile
25th Percentile
Median
75th Percentile
90th Percentile
2011-12
9.0%
12.0%
16.0%
26.0%
41.0%
2012-13
8.9%
12.0%
16.2%
20.0 %
30.1%
The spread of variable pay range has shown a considerable

decrease as compared to 2011 -12
Median Annual Variable Pay (as % CTC)

50%
Across all industries, the variable pay has reduced most for Top
Management by 2.5% points
40%
30%
25.0%
The higher payout is expected to be at 30% as compared to

41% last year
22.5%
The median variable pay remains the same as compared to last

year
20.0%
20%
15.0%
15.1%
19.0%
10%
14.0%
14.0%
0%
JM
MM
2011-12
SM
TM
2012-13
16

Attrition Analysis
40%
34%
35%
30%
25%
22% 23%
18%
25%
20%
15%
10%
17%
11%11%
8%
17%
12%
15%
11%
12%10%
8%
7%
22%
22%
20%
16%
13%
8% 8%
16%
14%
11%9%
4%
5%
7% 6%
10% 11%
8%
4%
10%
14%13%
9%
1%
0%
Information
Technology
Information
Technology
Enabled
Services
Infrastructure & Pharmaceuticals,

Real Estate
HealthCare &
LifeSciences
JM
MM
Consumer
Business &
Retail
SM
Financial
Services
Manufacturing
Energy &
Resources
Media &
Advertising
Other(s)
TM
Attrition continues to remain a key area of concern in the Indian industry
Top Attrition Challenges
Junior management level faces highest level of attrition in the ITeS sector at 34%
Pharmaceutical, Healthcare & Life Sciences faces highest overall attrition at 22%. This
is followed by ITeS and Media & Advertising at 16%
Better pay elsewhere
The most prevalent reason employees leave organizations is better pay elsewhere
Personal reasons
Many employees are also seeking to upgrade their current skillsets and are leaving
organizations to pursue further studies in India and abroad
Pursue further studies
Manufacturing and Energy & Resources faced lowest overall attrition at 8%
Improved work - life balance is another area which is slowly but steadily gaining
momentum as employees seek to consciously decrease levels of stress at the
workplace
17

Human Capital Trends
Human Resource Challenges
Retaining critical talent
Outsourcing of certain services
Hiring of skilled talent
Setting up Shared Services Centers
Engaging the employees
Headcount reduction
Hiring and retaining critical talent is the

top Human Resource challenge being
faced by leaders today
Cost optimization measures have become

increasingly important given the current
economic scenario
The competitive market is a key

contributor to the same
Offshoring / Outsourcing of certain services

has been rated highest amongst measures
adopted. Organizations do not see value in
continually investing resources & time in
activities which are non-core to the
business
Ability to develop managers who will be

able to take up potential leadership
positions, also seems a significant cause
of concern
Retention of employees is also linked to

Employee Engagement and the same has
been ranked as the 3rd human resource
challenge
Developing an Employee Value
Proposition will help organizations engage
and retain employees over the long term
18
Cost Optimization Measures
Setting up Shared Service Centers also

helps organizations optimize existing
resources and manage work more
efficiently
In certain cases, Headcount reduction is
also being considered, as employee cost is
significantly high in certain organizations
Contents
Survey Details
Survey Highlights
Participant List
19
Sector Analysis:
Consumer Business
& Retail

Executive Summary
21
Increments have been conservative at 12%,

attributable to the prevalent market sentiment
The increment percentages have dropped by 1-2%

points across levels compared to last year, with
maximum impact at top management level
The median variable pay in this sector is 18%;

competitive to the industry benchmark of 16.2%
High employee turnover in this sector has made

Engaging and Retaining talent a perennial burning
priority in this sector
Outsourcing, Setting up shared services and

Freeze on company travel were the top 3 cost
optimization measures in this sector

Sector Snapshot
Industry Overview
The fast moving consumer goods (FMCG) segment is the fourth largest sector in the Indian
economy
The retail segment too is experiencing exponential growth, with retail development taking place
not just in major cities and metros, but also in Tier-II and Tier-III cities
Growing population, rising incomes, urbanization, the advent of modern retail, and a
consumption-driven society present tremendous opportunity for growth for this sector
High brand consciousness and emergence of concepts such as quick and easy loans, EMIs, loan
through credit cards, has further made purchasing easy for Indian consumers
Leading players of consumer products have a strong distribution network to capitalize on rising
brand consciousness and expand into yet untapped rural India
Consolidation, Expansion, rural penetration, channel integration (both upward and downward)
and product innovation are notable trends in this sector
Key Challenges
Counterfeiting and pass-offs taking advantage of the lack of literacy & consumer knowledge is a
challenge for the FMCG sector. They not only affect the revenues, but also undermine the brand
equity of big brands
Apart from the pressure on margins, the biggest fear of Indian FMCG players is the introduction of
private labels as they tend to the consumers price points, particularly at the mass level
Retail today has changed from selling a product or a service to selling a hope, an aspiration and
above all an experience for a consumer, that consumer would like to relive again and again
Foreign retailers are entering into Indian market to share a huge profit through the automatic route
in cash & carry (wholesale)
Facing stiff competition from these global retail giants, discounting is becoming an accepted
practice which further cuts into the profit of the Indian retail players
22
Performance Highlights
The FMCG sector generated

revenues worth USD 27.9
billion in 2010
FMCG industry expanded at
a compound annual rate of
15.4 % during 2006-10
The Indian retail market
stands at USD 396 billion in
2011
The organized retail segment
expected to be 9% of total
retail market by 2015 and
20% by 2020
Semi-urban and rural
segments are growing at a
rapid pace, currently
accounting for 33 % of
revenues in 2011
Source: Deloitte Retail POV Indian Retail
Report Changing with the changing times;
IBEF report

Participant Profile
Service wise Breakup
Employee Strength wise Breakup
Revenue wise Breakup
8%
18%
40%
8%
25%
8%
46%
9%
60%
36%
42%
Consumer Business
Retail
< 100 Cr.
100 - 500 Cr.
500-1000 Cr.
> 1000 Cr.
Undisclosed Participants:
< 500
2000 - 5000
10000 - 25000
500 - 2000
5000 - 10000
> 25000
Close to even mix of consumer business and retail segments participated in the survey
82% of the participants in the consumer business sector were organizations with an Annual Revenue over ` 500 Cr. representing a
good mix of the market
The survey received participation of companies at various maturity levels, making the mix a good representative sample of the
market. 42% of the participating organizations had an employee strength of between 500-2000, followed by 25% organizations with
less than 500 employees
23

Increments have been conservative; organizations remain cautious due to the prevailing low consumer
confidence
10th
25th
50th
75th
90th
JM
10.9%
11.6%
12.0%
14.8%
15.0%
MM
10.0%
11.6%
12.0%
13.5%
15.3%
SM
9.0%
10.0%
11.8%
12.0%
15.5%
TM
7.9%
10.0%
10.0%
11.9%
12.8%
The sector Median for annual Increment % is 12%, in-line

with the annual increment % median across all sectors
Majority of the sector companies have given increments to all
Junior, Middle, Senior & Top Management
Increment Range
50%
40%
100%
30%
90%
20%
10%
12.0%
11.8%
10.0%
0%
JM
MM
SM
TM
The spread of the Increment Range is wider at senior levels as

compared to junior levels, indicating the Top Management
increments are subjected to higher scrutiny and variation as
compared to the lower levels
80%
12.0%
70%
60%
JM
50%
MM
40%
SM
30%
TM
20%
10%
0%
0-5
24
5 - 10
10 - 15
15 - 20
Range of Increments
20 - 25
> 25

Annual increment have dropped by 1-2% points across levels, with maximum impact at top management levels
10th Percentile
25th Percentile
Median
75th Percentile
90th Percentile
2011-12
10.0%
11.0%
13.2%
16.0%
17.1%
2012-13
9.0%
10.8%
12.0%
12.8%
15.3%
Median Increments Across Levels
20%
18%
16%
14%
13.0%
13.3%
13.4%
12.0%
12.0%
11.8%
13.5%
Higher increments are expected to be around 15% as

against 17% last year, a significant 2 % points drop
12%
10%
Increments this year have been conservative attributable to

the prevalent market sentiment
10.0%
8%
Median annual increment percentages dropped across

levels; the reduction is highest at top management levels
by nearly 3.5% points
6%
4%
2%
0%
JM
MM
2011-12
25
SM
TM
2012-13

Variable pay in the consumer business and retail sector (18.2%) is competitive when compared to the crosssector benchmark of 16.2%
10th
25th
50th
75th
90th
JM
10.0%
10.0%
15.0%
18.5%
20.0%
MM
10.0%
11.5%
14.0%
18.5%
21.2%
SM
11.4%
15.2%
19.0%
25.0%
27.1%
TM
15.6%
19.5%
25.0%
26.3%
36.0%
The sector median variable pay stands at 18.2%; higher than the
overall industry median
While most of the companies have a variable pay plan for

corporate and support staff, attractive sales incentive schemes is
a common practice for the frontline sales force to motivate them
to exceed expectations
Monthly/Quarterly/Biannual incentive based payments against
annual payments is gaining popularity in this sector, considered
effective to motivate people in a high turnover sector like retail
120%
Level wise Frequency Distribution
100%
60%
60%
40%
20%
15.0%
25.0%
19.0%
14.0%
0%
JM
MM
SM
TM
80%
50%
40%
30%
JM
MM
SM
TM
20%
10%
0%
< 10
10 - 20
20 - 30
30 - 50
50 - 80
> 80
The spread in the variable pay range is seen highest at the top
management levels
26

Variable Pay Trends
Senior and Top management levels have experienced significant drop in the variable pay
10th Percentile
25th Percentile
Median
75th Percentile
90th Percentile
2011-12
12.0%
15.0%
17.0%
28.0%
50.0%
2012-13
10.0%
14.3%
18.2%
19.0%
28.0%
The spread of variable pay range has considerably shrunk ;

across the sector the variable pay range between 10th & 90th
percentile has reduced to 10-28% as compared to 12-50% last
year
50%
40%
30%
25.0%
A higher payout is expected to be around 30% as compared to

50% last year
19.0%
20%
15.0%
14.0%
At median, the variable pay percentage has

increased
indicating that increasing imperative of performance based pay
across cadres is necessary to remain competitive
19.5%
16.0%
10%
10.0%
11.5%
0%
JM
MM
2011-12
27
SM
TM
2012-13

Reasons for Attrition
Hiring talent
Better pay
Engaging people
Career options
Personal Reasons
Freeze on company travel
3 Training & development of potential

leaders
High employee turnover in this sector has

made Engaging and Retaining talent a
perennial burning priority in this sector
Attrition is a challenge faced by this sector

primarily in the Junior Management level
and in the Sales roles
With customer experience becoming a

prime differentiator for a company in this
sector, the training and engagement of
the workforce has become critical
While organizations try and pay

competitively, they are still losing
employees to better pay elsewhere
Hiring and keeping good employees also

substantially reduces costs for employers,
which in turn affects their competitiveness
and profitability
The failure to hire and retain qualified
people is costly in a number of ways like
loss of training investment, need for
higher inventory et al
There is also a need to develop potential
leaders to assume leadership positions in
the organization in the long term
28
Also these jobs are not perceived as career

builders in short run as there is no clear
career path for these employees
So within a couple of years in the job
employees either opt for further studies or
better career prospects
Outsourcing/ Offshoring is the most

preferred route with 50% of companies;
includes outsourcing payroll, leave and
other administrative activities
Close second is Setting up Shared Service
Centers an option explored by several
key sector companies to help meet the
tight budget targets
Travel has been restricted to only Senior
and Top management level or justified
essential business requirements only
Reduction in external hiring, overhead
expenses and balanced approach to
increase in top management salaries were
some other approaches undertaken by
participants in this sector
Industry Sector
Manufacturing
Sector Snapshot
Manufacturing
Executive Summary
The increments in the Manufacturing
Sector are amongst the highest across all
sectors for 2012 2013
At the median, Annual Increment is 15%
Annual Increments have increased
compared to last year and this may be due
to the market corrections taking place in
the sector and it also indicates signs of
the sector slowly picking up pace.
Variable Pay median is at 20% and it has
increased compared to last year where it
was 12.5%
Top Management has received the highest
variable pay
30
Manufacturing
Sector Snapshot
Industry Overview
The Indian manufacturing sector is the mainstay of the entire Indian industry as
manufacturing output constitutes over 75 per cent of the index of industrial production (IIP)
The business expectation
India enjoys a competitive advantage on the global canvas owing to key reforms in
taxation, infrastructure and clusters (like special economic zones [SEZs]) implemented by
the Government, availability of reasonably-priced skilled labor workforce and a positive
eco-system
barometer of the overall
index (BEI), which acts as a
health of the manufacturing

sector, stood at 110.1 for the
assessment quarter while
Recent analysis finds that rising demand in India, together with the multinationals desire to
diversify their production to include low-cost plants in countries other than China, could
together help Indias manufacturing sector to grow six fold by 2025, to $1 trillion, while
creating up to 90 million domestic jobs
Key Challenges
RBI expects it at 117.2 for

the January-March 2012
quarter
Manufacturing exports from
The country would need to fully leverage the opportunities provided by the dynamics of
globalization
India could increase from
India has over 60% of population in the working age group of 15-59 years. Utilizing this
huge resource of manpower in the most efficient manner is also a challenge in front of the
Indian Manufacturing Industry
300 billion by 2015. This
To sustain or bring about further expansion in the sector, developing sound infrastructure,
visible and reliable supply chains, efficient process and updated technology would be key
per cent in the world
USD 40 billion to about USD
would make India rake-in a

share of approximately 3.5
manufacturing trade
Sources: Economist Intelligence Unit; IBEF;
Consolidated FDI Policy, Department of
Industrial Policy & Promotion (DIPP); Media
Reports
31
Manufacturing
Participant Profile
Annual
Revenue
wise
Break
up
Annual
Revenue Wise
Break
Up
Employee Strength
12%
9%
18%
5%
14%
8%
23%
72%
38%
100-300cr
300-500cr
500-1000cr
>1000cr
<500
10000-25000
500-2000
5000-10000
2000-5000
Undisclosed participants - 3
Majority of the participants in the Manufacturing sector were organizations with an Annual Revenue over `1000 Cr. The second
highest participation came from organizations with Annual Revenue between `500-1000Cr
38% of the participating organizations had an employee strength of between 2000-5000, followed by 23% organizations with
between 500-2000 employees
32
Manufacturing
Annual Increments 2012-13
At the median (15%), Annual Increments are higher than the overall cross-sector median
10th
25th
50th
75th
90th
JM
10.0%
12.0%
14.0%
15.3%
18.0%
MM
10.0%
12.0%
15.0%
15.5%
18.0%
SM
7.6%
10.0%
13.0%
15.0%
15.9%
TM
7.5%
10.0%
13.0%
15.0%
20.0%
The industry average for overall Annual Increment % is

15% which is higher than the overall industry
When comparing the annual increment % across levels
and percentiles, the increments show some amount of
variation across the percentiles except at the 75th
percentile. Here the increment % remains close to 15%
Increment Range
50%
40%
30%
100%
20%
10%
13%
13%
0%
JM
MM
SM
TM
Top Max; Bar Median; Bottom Min
Majority of participants have given increments in the range of 10

- 18% across all levels Junior, Middle, Senior & Top
Management
A high variation in the increment is observed at Top Management

where majority of the increments are between 7% to 25%
Close to 10% of the top management level is getting increments
in the 0-5% range
90%
15%
14%
80%
70%
60%
JM
50%
MM
40%
SM
30%
TM
20%
10%
0%
0-5
5 - 10
10 - 15
15 - 20
20 - 25
> 25
Range of Increments
33
Manufacturing
Annual Increments Trends
Increments at the median level (15%) have increased considerably compared to last year (12.3%)
10th Percentile
25th Percentile
Median
75th Percentile
90th Percentile
2011-12
9.3%
12.0%
12.3%
14.0%
17.7%
2012-13
9.0%
12.0%
15.0%
15.0%
17.0%
Inflation continued to be a concern for the manufacturing

sector in the beginning of the last year due to lower demand
from the domestic as well as export markets. Plus the high
interest rate by the RBI put more pressure on the
manufacturing sector
Inspite of this, the sector showed the strongest improvement in

business conditions since May 2011. This is reflected in the
industry median for annual which is 15%
20%
18%
15.0%
14.0%
16%
14.0%
14%
12%
13.0%
14.0%
13.4%
13.0%
Overall the sector is relatively bullish as compared to last year

The median increments for junior and middle is reported at
14% & 15% respectively whereas that for senior and top is
reported at 13%
10%
8%
6%
The increment given to the top management level remains the

same at 13% whereas there is a small dip in the increments
for senior management by 1% point
4%
2%
0%
JM
MM
2011-12
SM
TM
2012-13
34
Manufacturing
Variable pay % in the manufacturing sector (20%) is above the overall cross-sector benchmark of 16.2%
The industry median variable pay % is around 20% which is

higher than the overall industry benchmark of 16.2%
10th
25th
50th
75th
90th
JM
10.0%
10.0%
15.0%
20.0%
29.3%
Top Management has received the highest Variable Pay
MM
10.6%
14.4%
15.0%
22.9%
28.5%
SM
13.5%
15.0%
20.0%
30.0%
30.0%
TM
15.0%
20.0%
21.8%
28.0%
34.5%
The highest variation in the variable pay ranges have been

observed for the Top and Middle Management ranging from 10%
to 45% and 5% to 40% respectively; the lowest variation is found
for the Junior Management
120%
100%
80%
60%
40%
15%
22%
20%
15%
100%
0%
JM
MM
SM
90%
TM
Majority of the organizations gave variable pay to Junior, Middle

and Senior Management employees within the range of 10%20%
The Top Management in the majority of the organizations in this
sector received variable pay in the range of 10- 45%
The Senior Management have received variable pay in the range

between 9% to 40%
20%
80%
70%
JM
MM
SM
TM
60%
50%
40%
30%
20%
10%
0%
< 10
10 - 20
20 - 30
30 - 50
50 - 80
> 80

35
Manufacturing
Variable Pay
The median variable pay % has shown a considerable increase across all levels
10th Percentile
25th Percentile
Median
75th Percentile
90th Percentile
2011-12
7.0%
11.0%
12.5%
15.0%
18.0%
2012-13
12.0%
16.3%
20.0%
25.0%
30.0%

50%
The sector median for variable pay % is 20%. This is higher

than the median for last year which was at 12.5%
40%
Across all levels, median Variable Pay as a percentage of

Cost To Company (CTC) for Top and Senior Management is
the maximum 22% and 20% respectively followed by Middle
Management and Junior Management at 15%
30%
22%
20.0%
20%
15.0%
15.0%
21.8%
15%
10%
11%
8%
The median variable pay % has shown an increase across all

levels except Top Management, where it is nearly constant
as compared to last year.
0%
JM
MM
2011-12
SM
TM
2012-13
36
Manufacturing
Top 3 HR Challenges
Training & developing potential

leaders
Better Pay
Retaining of Critical Talent
Personal Reasons
Engaging Employees
Pursue Further Studies
Headcount Reduction
The top HR priorities for 2012-2013

broadly reflect the components of the
talent management cycle which begins
with hiring of skilled labour, retaining
critical labour and engaging them
Training & development of potential
leaders is indicated as the top most
priority
Following closely as the next top priority is
the retention of critical talent. The sector
is becoming highly competitive with
international companies setting-up their
base in India and poaching talent from
local markets
37
Key Reasons for Attrition
Better Pay has been ranked as the topmost

reason for attrition in the manufacturing
sector
The 2nd focus area also reflects that
employees also leave organizations for a
variety of personal reasons ranging from
relocation, marriage etc.
Employees are also looking to upgrade
their skills and education and leaving
organizations to pursue higher education in
India and abroad
Among the above measures, Setting up

Shared Services is the most preferred route
that companies prefer taking with regard to
cost optimization measures. Earlier, this
option was utilized more by the IT/ITES
sector, however, looking at the current
market, even many manufacturing
companies are exercising this option
This is closely followed by
Outsourcing/Offshoring of non essential
activities that is being undertaken by many
organizations
Drastic measures such as Reduction in
Headcount also features in the top three
cost optimization measures
Sector Analysis
Infrastructure &
Real Estate

Executive Summary
The increments in the Infrastructure and
Real Estate sector are amongst the
highest across all sectors for 2012 2013
At the median (15%), Annual Increments
are considerably higher than the overall
cross-sector median
Annual Increments at median level are the
same as compared to last year
Variable Pay is not a sector-wide practice
Variable Pay median for this sector is at
15% and is the same as compared to last
year
39

Sector Snapshot
Industry Overview
There has been a significant injection of foreign direct investment (FDI) during the last
financial year in the vicinity of 23.6 % growth
With regards to the Real Estate sector, the Indian economy has witnessed robust growth in
the last few years and in the coming years, is predicted to be one of the fastest growing
sectors in India
Key Challenges
Infrastructure constantly playing catch-up to growing population and urbanization demands
Challenges to the Real Estate industry revolve around transparency, limited market history,
forecasting difficulties as well as complexities regarding ownership records and land titles;
further hampered by lack of proper urban planning
As per the Government

projections, Indian
infrastructure industry is
aiming to attract investments
worth USD 1 trillion during
the 12th Plan Period (201217), with at least 50 per cent
funding from the private
sector
The Real Estate industry in
in India is expected to grow
at 19% over the next 3 years
with a major chunk of it
focused on Tier 1 cities. The
revenue currently stands at
around USD 66.8 billion for
the entire industry
Sources: Economist Intelligence Unit;
IBEF;
Consolidated
FDI
Policy,
Department of Industrial Policy &
Promotion (DIPP); Media Reports
40

Participant Profile
Annual Revenue wise Break up
Employee Strength
11%
11%
22%
22%
11%
45%
22%
45%
11%
< 100 Cr.
> 1000 Cr.
300 - 500 Cr.
500-1000 Cr.
100 - 300 Cr.
< 500
> 25000
10000 - 25000
2000 - 5000
500 - 2000
5000 - 10000
Majority of the participants in this sector were organizations with an Annual Revenue of over `1000 Cr. The second highest
participation came from organizations with Annual Revenue falling in the range of ` 500-1000 Cr
45% of the participating organizations had an employee strength of between 500-2000, followed by 22% organizations with
between 2000-5000 as well as <500 employees each
41

Annual Increment median for this sector is at 15%
Increment Range
50%
40%
30%
The industry median for increments for this sector is 15%.
The maximum range of increments for Middle and Senior

management levels is around 20%
The Top Management range is high, however the median

is very low, which means that it is affected by one
organization projecting very high increment figures
20%
12.5%
10%
15.0%
12.5%
10.0%
0%
JM
MM
SM
TM

100%
Majority of Infrastructure and Real Estate companies have given

increments in the range of 10-14% and a significant number of
organizations have also given increments in the range of 15
19%, across all levels Junior, Middle, Senior & Top
Management
Overall, we see a lot more companies giving greater increments
to Junior and Middle Management than Top Management
90%
80%
70%
60%
JM
50%
MM
40%
SM
30%
TM
20%
10%
However, increment levels have fallen this year as compared to

last year
0%
0-5
5 - 10
10 - 15
15 - 20
20 - 25
> 25
Range of Increments
42

Annual Increments have reduced compared to last year; median increment for this sector still high compared
to overall cross-sector median for annual increment
20%
18%
16%
10th Percentile
25th Percentile
Median
75th Percentile
90th Percentile
2011-12
12.1%
13.6%
15.0%
19.6%
21.8%
2012-13
6.4%
10.0%
15.0%
15.9%
16.8%

15.0%
15.0%
Increments have fallen considerably compared to last year

with organizations at the 90th percentile also giving
increments at 5% points less than last year
This could be because major market corrections were carried

out across the industry last year giving rise to high increment
levels then a strategy that was employed by most
organizations to retain skilled/trained employees
Across all levels, Annual Increment (%) median for Top

Management (10%) is considerably lower than Senior
Management (15%), as well as Junior and Middle
Management (12.5%) levels
15.0%
12%
10%
The industry Median for annual Increment % is 15%. This is

higher than the overall annual increment % median (12%)
15.5%
12.6%
14%
12.5%
12.5%
8%
10.0%
6%
4%
2%
0%
JM
MM
2011-12
SM
2012-13
TM
43

Variable Pay is not a sector-wide practice
120%
100%
The industry median variable pay % for the sector is 15%
Senior and Top Management have received the highest variable pay.
At the Junior level, employees have received around 12.2% at median
however there are some organizations that do not give Variable Pay
to their lower management levels
Note: Variable Pay is not a sector-wide practice as half the

organizations participating in the study did not have a variable pay
scheme in place. These participants may give out ad-hoc bonuses
instead. Also, no company gave variable pay in the range of 30-50%
to Top management.
80%
60%
40%
20%
20.0%
15.1%
12.2%
20.0%
0%
JM
MM
SM
TM
Level-wise Frequency Distribution

100%
Majority of the organizations in this sector gave variable pay to

their Senior Management in the range of 10-20%. Most of these
were at the upper limit of this range (i.e. at or near 20%). The
same is true for Top Management
83% of the organizations also gave their Middle Management
variable pay in the range of 10-20%.
Majority of the organizations that gave variable pay to Junior
Management, did so in the range of 10-15%
90%
80%
70%
JM
60%
MM
50%
40%
SM
30%
TM
20%
10%
0%
<10
10-20
20-30
30-50
50-80
>80
44

Variable Pay
Variable Pay % median is at 15%; lower than the overall cross-sector median (16.2%)
10th Percentile
25th Percentile
Median
75th Percentile
90th Percentile
2011-12
8%
11%
14.5%
15%
16%
2012-13
9.5%
12.75%
15%
15.75%
18.5%

50%
40%
30%
20%
20%
20%
15%
12%
20%
16%
10%
10%
12%
0%
JM
MM
2011-12
SM
2012-13
TM
The sector median for variable payout % is 15%

Across all levels, Variable pay (%) median for Top and
Senior Management is the maximum (20%), followed by
Middle Management (15.1%), and then Junior
Management (12.2%)
For Middle and Senior Management, the median variable
pay % has increased a lot as compared to last year.
Overall, the median variable pay % for this sector has
increased marginally. However, this is still lower than the
overall industry median Variable Pay % (16.2%)
One important point to note is the change in the ratio of
variable pay component as a percentage of CTC which
shows an upward trend. This shows an inclination
towards more standard processes and methods of reward
and a shift away from ad-hoc rewards
45

Top 3 HR Challenges
Hiring Skilled Talent
Better Pay
Setting up Shared Service Centers
Training & Development
Further Studies
Outsourcing / Offshoring
Engaging Employees
Work-Life Balance
Freeze on Company Travel
This sector is concerned with the

challenges posed by Talent especially
by Training & Development and Hiring
Talent which are the most wide-spread
challenges and also the most crucial
ranked challenges
This is a niche sector and hence difficult
to find established leaders in this space
and hence training and developing
potential leaders is the biggest potential
challenge faced by the sector
While engaging employees, organizations
may also want to look at leveraging ways
to introduce some degree of work-life
balance so as to also reduce attrition
46
Better Pay has been indicated to be the

Number 1 reason for attrition in this sector,
even though the increments are high this
year
The need for an improved work-life balance
is one of the top three reasons for attrition
and this is something that the sector as a
whole may need to look at particularly
Better career opportunities, further studies,
personal reasons are the most wide-spread
reasons for attrition in this sector
Among the above measures, Setting up of

shared services centers and freezing
company travel are the two options that
majority of the companies have/plan to
explore for cost optimization; this is closely
followed by outsourcing/offshoring certain
services. These are methods taken up by
many organizations across all sectors
Shared Service Centers and Outsourcing
involve significant initial investment but
from a long term perspective, they are
strategic investments and will save huge
costs
Some organizations also plan to
explore/have explored the option of
headcount reduction, although this is not
the preferred method
Sector Analysis
Pharmaceuticals, Healthcare
& Life Sciences
Pharmaceuticals, Healthcare & Life Sciences

Executive Summary
The increments in the Healthcare sector are
amongst the lowest across all sectors for 2012
2013
Median annual Increments for this industry are
the same as the overall industry median - 12%
Median Variable Pay % is at 15%
Variable Pay is spread across a wide range
across levels
Variable pay is not necessarily a sector-wide
practice as a few participants do not have a
Variable Pay scheme in place
Attrition is highest at Middle Management level
48

Sector Snapshot
Industry Overview
Healthcare expenditure in India expected to increase by 12% per annum between 2011-15
Foreign Direct Investment in the country has increased and is now worth USD 1,183.04
million in hospitals and diagnostic centers and USD 9,170.24 million in drugs and
pharmaceutical space
The industry stands at USD
36 billion today and is
expected to grow at 15% per
annum
Recently, there have been a large number of acquisitions of domestic pharmaceutical

companies by foreign majors
Increasing Government expenditure on public healthcare expected
The industrys growth forecast is defined by rising incomes of the urban middle-class in
particular, leading to greater affordability of private healthcare facilities, a growing aged
segment of the population, and increasing risks from changing disease patterns and large
population of lifestyle diseases like Diabetes, Cancer, etc.
Key Challenges
The Government has made/proposed a lot of policy changes to control the rate of
takeovers of domestic pharmaceutical companies by large MNCs, in order to control the
price of medicines
The revenue of the industry

is expected to reach USD
280 billion between 2012
2022
Contract Research and
Manufacturing Services to
increase at the rate of
around 13% per annum
globally over the next few
years
Sources: Economist Intelligence Unit;
Corporate Catalyst India; Department of
Industrial Policy & Promotion (DIPP);
IBEF
The threat of controlled licenses being awarded to companies to manufacture patented

drugs at cheaper rates
Major companies are facing several patent related issues which have major impact on their
exclusive revenue streams this is giving rise to the need for organizations to find costcutting solutions
49

Participant Profile
Annual Revenue wise Break up
9%
Employee Strength
8%
9%
23%
9%
15%
37%
15%
36%
39%
< 100 Cr.

300 - 500 Cr.
> 1000 Cr.

500-1000 Cr.
100 - 300 Cr.
< 500
10000 - 25000
500 - 2000
> 25000
2000 - 5000
5000 - 10000
Majority of the participants in the Healthcare sector were organizations with an Annual Revenue of over `1000 Cr. The second
highest participation came from organizations with Annual Revenue between `100-300 Cr
39% of the participating organizations had an employee strength of between 2000-5000, followed by 23% organizations with less
than 500 employees
50

The increments in the Healthcare sector are amongst the lowest across all sectors for 2012 2013
Increment Range
50%
40%
30%
The ranges of the increments also do not vary much across levels
the majority lying between 9 to 15 %
When comparing the median annual increment % across levels

and percentiles, the increments are standard at 12%
20%
12.0%
10%
12.0%
12.0%
12.0%
0%
JM
MM
SM
TM

100%
Majority of Health Care companies have given increments to all

Junior, Middle, Senior & Top Management causing the overall
increments in this sector to remain relatively low
Within the range of 10-14% the Top Management increments are
all stable at 12% across organizations
The 12% increments are also mostly standard across the other
levels with a few organizations giving higher increments to the
Junior and Middle Management (15-19% range)
90%
80%
70%
JM
MM
SM
TM
60%
50%
40%
30%
20%
10%
0%
0-4
5-9
10-14
15-19
20-24
>25
Range of Increments
51

The median increment in the Healthcare sector is at 12% for 2012-13
20%
10th Percentile
25th Percentile
Median
75th Percentile
90th Percentile
2011-12
10.0%
10.3%
12.0%
14.0%
14.7%
2012-13
10.4%
11.5%
12.0%
12.8%
13.8%

exactly the same as the overall annual increment % median
across all sectors
There is a marked difference at the Top Management level

where the Annual Increment (%) has increased from 10% last
year to 12% this year
While the median increments have remained stable across all

levels, a lot of companies opt for compensating for this with
attractive sales incentive schemes in this sector
While considering overall ranges of increments, the median

has remained the same as last year. Increments have reduced
slightly at the 75th and 90th percentile. This is a trend followed
by many different sectors
18%
16%
14%
12%
12%
12%
12%
12%
10%
10%
8%
6%
4%
2%
0%
JM
MM
2011-12
SM
2012-13
TM
52

Variable Pay has a wide range across levels; not necessarily a sector-wide practice
120%
Senior and Top Management have received the highest variable pay.
At the Junior level, employees/sales staff have received better
increments as the variable pay component makes up a lesser fraction
of their pay; although, the variable pay range is quite broad for Junior
levels
Note: 4 companies in this sector did not have a Variable Pay scheme.
However, sales incentives were provided to the employees as is the
prevalent practice in this sector
100%
80%
60%
40%
20%
20.0%
15.0%
10.2%
20.0%
0%
JM
MM
SM
TM

Among the companies that do give a Variable Pay, the majority

of the organizations gave variable pay to Junior, Middle and
Senior Management employees within the range of 10-20%
The variable pay hovers between 10-15% for Middle
Management and between 10-12% for Junior Management
This is also balanced with attractive sales incentives, especially
for Junior Management where it matters the most
Senior Management variable pay % mainly hovered around
20%.
Top Management has received Variable pay across several
ranges, however the median is at 20%
90%
80%
% of Companies
100%
70%
60%
JM
50%
MM
40%
SM
30%
TM
20%
10%
0%
<10
10-20
20-30
30-50
50-80
>80
53

Variable Pay
Variable Pay % median for this sector is at 15%
10th Percentile
25th Percentile
Median
75th Percentile
90th Percentile
2011-12
14%
16%
18%
21%
29%
2012-13
8.7%
9.5%
15%
16.5%
32%

50%
40%
30%
20%
20%
25%
20%
TM
The variable pay for this sector is the lowest at Junior and
Middle Management levels
10%
0%
JM
MM
2011-12
SM
Across all levels,

Variable pay (%) median for Top and
Senior Management is the maximum (20%) , followed by
Middle Management (15%), and then Junior Management
(10.2%)
While the Median Variable Pay % across Junior, Middle and
Senior Management has remained almost constant since last
year, this has dropped considerably for Top Management this
year
15%
11%
The sector median for variable pay % is 15%. This is below

the overall industry median variable pay % at 16.2%
2012-13
54

Top 3 HR Challenges
Retaining Critical Talent
Better Pay
Engaging People
Personal Reasons
Better Career Opportunities
Freeze on Company Travel
Retaining critical talent is of great

importance in this sector as information is
sensitive and organizations would not
want to lose employees and vital
information to competitors especially in
the current environment in which the
sector is operating
Engaging employees and hiring skilled
talent could also be indicative of a dearth
of qualified new talent pools that
organizations can tap into
This indicates towards a significant
concern in the sector regarding the talent
practices and pinpoints an area where
organizations need to concentrate future
efforts in HR
55
At 25%, the Middle Management in the

Healthcare sector shows the highest
attrition rates across all sectors and levels
Organizations in this sector have recorded

a decrease in the annual increment %
which may be one of the causes of the high
rank for Better pay
The dynamic nature especially of the
sales aspect of this sector is also
responsible for high attrition and a high
rank to leaving for Better Career
Opportunities with Better Pay
Pursuing further studies also ranks high as
a reason for attrition. Especially at Junior
Management level, the average profile of
sales staff would be that of a graduate
looking to pursue post-graduation or MBAs
Among the above measures, Outsourcing/

Offshoring is the most preferred route that
companies prefer taking with the majority of
the participants selecting this option
generally outsourcing payroll, leave and
other administrative activities
This is followed by Setting up Shared
Service Centers an option explored by
several key pharmaceutical companies to
help focus on core activities
Freezing on company travel is also another
option considered by some companies in
order to reduce costs. Organizations are
also considering moving towards videoconferencing facilities and making tough
decisions on the extent of travel required by
their personnel
Sector Analysis:
Financial Services
Financial Services
Executive Summary
57
The median increments in the sector is 10% in 2012-13,

2% points lower than overall industry median of 12%
Increments have been frozen across levels in some

participant companies in this sector
The median variable pay announced this year is 20%;

lower by 2% points compared to 22.3% in 2011-12
There is a marked decrease in the range of variable

payout; from 0-120% in 2011-12 to 10-80% in 2012-13
Skilled talent hiring, retention and development is

critical is a priority for this sector
The sector noticed some strong cost optimization

measures like head count reduction, curtailment of
employee training and recognition program
Financial Services
Sector Snapshot
Industry Overview
The Financial Stability Report by RBI for December 2011 observes that the domestic financial
system remains stable in the face of an adverse international backdrop
Rising incomes are driving the demand for financial services across income brackets
Financial inclusion drive from Reserve Bank of India (RBI) has expanded the target market to
semi-urban and rural areas
Ratings agency Moody's believe that strong deposit base of Indian lenders and Government's
persistent support to public sector and private banks would act as positive factors for the `64
trillion Indian banking industry amidst the negative global scenario
Fitch Ratings says that the outlook on the major Indian NBFC sector is stable in 2012, but
remains cautious on the medium-term outlook of the sector in view of challenges in raising costeffective funding that may squeeze margins, impair growth prospects and increase the costs of
raising fresh capital
In capital markets, asset management industry in India is among the fastest-growing in the world,
grown four fold in past 5 years
The Indian Insurance sector is expected to reach around USD 400 billion in premium income by
2020
Key Challenges
Slow down in GDP growth could have some downstream impact on asset quality
Additional capital will need to be raised due to the compulsions of implementation of Basel III, a
growing (albeit at a potentially decelerated rate) economy and financial inclusion
Source: www.sebi.gov.in; www.rbi.gov.in; IBEF report, Fitch Ratings
58
The banking sector reported

a growth rate of 19% (CAGR)
over the last three years
Bank loans registered a
growth of 16.4% in 2011-12,
while deposit growth stood
at 14%
More than 80 per cent of
equipment leasing and hire
purchase activity in India is
financed by NBFCs
The investable assets of
HNWIs in India has grown at
a healthy 26% CAGR over
2005-10
FIIs have invested in stocks
and debt securities worth $ 9
billion in the fiscal 2011-12
Over 2003-10, life insurance
premiums increased at a
CAGR of 25% and the non
life insurance premiums
increased at a CAGR of 18%
Financial Services
Participant Profile
Service wise Breakup
7%
17%
31%
25%
14%
11%
22%
16%
29%
35%
28%
Bank
Capital Market
Insurance
NBFC
17%
< 100 Cr.

300 - 500 Cr.
> 1000 Cr.
18%
9%
100 - 300 Cr.

500-1000 Cr.
< 500
2000 - 5000
10000 - 25000
21%
500 - 2000
5000 - 10000
> 25000
The Indian financial sector includes banks, non-banking financial companies(NBFCs), Capital Market and Insurance Companies. The
survey had a close to even mix of companies participating in it
61% of the participants have revenue more than ` 300 crore, a good representation of the industry at large
The survey received participation of companies at various maturity levels, with 29% organizations with less than 500 employees,
followed by 21% of the participating organizations having employee strength of between 500-2000
59
Financial Services
The annual increments have been somber with few participants having decided against any increments
10th
25th
50th
75th
90th
JM
8.1%
10.0%
10.0%
12.7%
15.0%
MM
7.6%
9.5%
10.0%
11.3%
12.4%
SM
7.1%
8.0%
10.0%
10.0%
12.2%
TM
5.4%
7.4%
9.3%
10.0%
11.0%
The increments paid out in the Financial Services Sector

is 10%, 2% points lower than cross sector median of 12%
Increments have been frozen across levels in many
participant companies in this sector
Employees in the lower and middle management levels
will receive increments in the range of 8-12%; the highest
increment to be 16% given at junior management level
Increment Range
50%
40%

100%
20%
90%
10%
10.0%
10.0%
10.0%
9.3%
0%
JM
MM
SM
TM
The spread in the increment range is seen highest at the senior

management levels; about 50% companies are giving out
marginal increments in the range of 5-8% of CTC
30%
80%
70%
60%
JM
50%
MM
40%
SM
30%
TM
20%
10%
0%
0-5
5 - 10
10 - 15
15 - 20
20 - 25
> 25
Range of Increments
60
Financial Services
Companies restricted increments for employees falling in the higher pay bracket; percentage to drop
significantly at the senior levels
10th Percentile
25th Percentile
Median
75th Percentile
90th Percentile
2011-12
10.0%
11.0%
12.5%
15.0%
18.2%
2012-13
7.6%
9.3%
10.0%
11.0%
12.9%
20%
2011 2012 was a relatively subdued year for the economy

with most of the companies treading on the side of caution
18%
16%
14%
12.5%
13.0%
12.0%
12%
11.4%
Increments across cadres will reduce to the tune of 2%

points as compared to last year
10%
8%
The increments announced this year is substantially low by

3-4% points compared to last year, indicating less take
home for the employees
10.0%
10.0%
10.0%
JM
MM
SM
9.3%
6%
4%
The increased regulatory influence in the western markets

is expected to have an impact on all payouts and
increments, particularly in the Indian Investment Banking
sector
2%
0%
2011-12
TM
2012-13
61
Financial Services
Variable Pay to be given across all levels with average payout to be around 20% to 25% of CTC
Variable Pay (% CTC) Percentiles
10th
25th
50th
75th
90th
JM
10.0%
11.5%
15.0%
22.5%
53%
MM
12.3%
14.8%
20.0%
31.3%
71%
SM
13.6%
16.5%
22.0%
26.3%
52%
TM
14.7%
20.5%
25.0%
30.0%
40%
The variable pay in the banking sector, traditionally high, are

slowly being competitive to the industry practices
The frequency of payout is generally annual, but there is a
growing trend of quarterly/biannual payouts particularly in junior
management levels in NBFCs to ensure higher engagement and
performance levels
Variable Pay (% CTC) Range

120%
100%
100%
80%
90%
60%
80%
40%
15.0%
25.0%
22.0%
20.0%
0%
JM
MM
SM
TM
% of Companies
70%
20%
60%
JM
50%
MM
40%
SM
30%
Payout distinctly differs within business segments in financial

services such as Banking, Insurance, Capital markets and NBFCs
20%
An indicator of the high caution levels within the financial services

organizations, and an effort to bring in more accountability for
sustainable performance
0%
TM
10%
< 10
10 - 20
20 - 30
30 - 50
50 - 80
> 80
62
Financial Services
Variable Pay Trends
The variable payouts in the current financial year will be bleak compared to last year as a result of uncertainty in
the global markets, particularly at senior levels
10th Percentile
25th Percentile
Median
75th Percentile
90th Percentile
2011-12
3.0%
14.0%
22.3%
45.0%
74.0%
2012-13
13.1%
15.8%
20.0%
26.3%
48.0%

50%
38.0%
40%
The variable pay announced this year is substantially low as

compared to last year
28.0%
30%
20.0%
20%
25.0%
15.0%
20.0%
10%
22.0%
15.0%
Due to change in regulation, Private banks and Investment

Banks are looking to review their structure with regards to
component of Variable Pay to Fixed Pay as per levels (Ref.
Deloitte Study on Variable Pay in Investment Banks)
There is a clear indication of some companies moving to a
more Fixed Pay structure with less dependence on the Variable
Pay component
0%
JM
With increased regulatory influence for real and sustained

protability, the sector traditionally known for its aggressive
performance based pay policy, appears to mellow down and
align itself to common industry practices
MM
2011-12
SM
TM
2012-13
63
Financial Services
Reasons for Attrition
Hiring talent
Better pay
Retaining People
Personal Reasons
Training & development of potential

leaders
Better career options
Freeze on company travel
In this sector, competent workforce is

critical to ensure margins in the intense
competition in the markets workforce
The sector is heavily dependent on skilled

manpower, strong customer relationships
and efficient customer service
Every competitor is looking for the highest

quality employee. Skilled talent hiring,
retention and development is critical is a
priority for this sector
A good employee is an asset to the

companies and every company in the
market is looking for the highest quality
employee
The failure to hire and retain qualified

people is costly in a number of ways like
loss of training investment, loss of
valuable customer relationships and
intelligence et al
Employees too exploit these opportunities

available in the market. Frequent job
changes are a common norm in this
sector, for better pay or career growth
There is also a need to develop potential

leaders to assume leadership positions in
the organization in the long term
64
Improved work life balance, further studies

and better utilization of skill sets are some
other reasons for attrition identified in this
sector
Outsourcing/ Offshoring is the most preferred

route with 60% of companies; includes
outsourcing payroll, leave and other
administrative activities
Close second is Setting up Shared Service
Centers an option explored by several key
sector companies to help meet the tight
budget targets
Travel has been restricted to only Senior and
Top management level or justified essential
business requirements only; cost reduction
measures include employees being
downgraded from Business to Economy class
travel
This sector also noticed some strong cost
optimization measures like head count
reduction, curtailment of employee training
and recognition program
Sector Analysis
Executive Summary
The increments paid out in the Information
Technology Sector have been conservative this
year, reflecting the mood of the industry
The industry median for overall Annual
Increment % is 11%
The sector median for variable pay is 15.1%.
This is the same as the median for last year
Hiring of skilled talent has come up as a major
HR challenge being faced by the industry
66
Sector Snapshot
Industry Overview
IT services exports is the

fastest growing segment,
growing by 19 per cent in
FY2012, to account for exports
of USD 40 billion
IT services is the fastest

growing segment in the Indian
domestic market, growing by 18
per cent to reach `589 billion,
driven by increasing focus by
service providers
Over 73 per cent of the revenue

comes from the export market
Top firm firms share around 35

per cent of total industry
revenue showing that the
market is fairly competitive
Global IT offshore spending

expected to grow at CAGR of
6.2 per cent during FY08-13.
Over the years, Indian IT service offerings have evolved from application development and
maintenance, to emerge as full service players providing testing services, infrastructure
services, consulting and system integration
Central to this strategy is the growing customer acceptance of Cloud-based solutions which offer
best in class services at reduced capital expenditure levels
There has been a considerable pull in traditional segments custom application development,
application management, IS outsourcing and software testing
Increased acceptance from mature segments such as BFSI, US, and large corporations, and
emerging segments such as retail, healthcare, utilities, SMBs, Asia Pacific and RoW
Industry re-tooling itself to adjust to rapid change in customer priorities from SLAs to increased
time-to-market
Emerging technologies cloud computing, mobility, social media and big data/analytics
unleashing new opportunities for the industry
Key Challenges
Economic Slowdown in west: Despite risk mitigation efforts from the organizations slow down
would effect IT negatively. IT, ITES has its revenue stream linked to the western markets
Attrition and retention of talent is a big challenge faced by the industry
Lack of trained people- The supply and demand of quality engineers who are capable is having a
huge gap
67
Sources: Nasscom; Deloitte Reports
Participant Profile
Employee Strength
Annual Revenue wise Breakup
14.3%
20.0%
42.9%
28.6%
80.0%
14.3%
< 100 Cr.
100 - 300 Cr.
500-1000 Cr.
> 1000 Cr.
300 - 500 Cr.
< 500
500 - 2000
2000 - 5000
5000 - 10000
10000 - 25000
> 25000
Majority of the participants in the IT sector were organizations with an Annual Revenue of above 1000 Cr
43% of the participating organizations had an employee strength more than 25000 employees
68
The increments paid out in the Information Technology Sector have been conservative this year, reflecting the
mood of the industry
10th
25th
50th
75th
90th
JM
10.8%
12.0%
12.0%
12.7%
13.4%
MM
9.8%
10.0%
10.0%
12.0%
12.1%
SM
7.6%
9.0%
10.0%
10.5%
11.2%
TM
6.8%
8.0%
9.0%
10.0%
10.4%
The industry median for overall Annual Increment % is 11%

The range of increments is between 10 to 20 %. That is mostly due
to the difference in the maximum & minimum increments paid to
Junior and Top management
Median for increments is highest for junior
management, and lowest for top management
and
middle
Increment Range 2012-13

50%
40%
100%
30%
90%
20%
10.0%
80%
10.0%
9.0%
0%
JM
MM
SM
TM
Majority of IT companies have given increments to all their

employees in the range of 10-12%, across all levels Junior,
Middle, Senior & Top Management causing the overall
increments in this sector to remain relatively low
Top Management increments across organizations have been
the lowest
Economic slowdown in the West has impacted the overall
sentiment in India and this has reflected in overall lower
projections for the year
69
12.0%
10%
70%
60%
50%
JM
MM
SM
TM
40%
30%
20%
10%
0%
0-5
5 - 10
10 - 15
15 - 20
20 - 25
> 25
Range of Increments
The increments paid out in the Information Technology Sector have been conservative this year, reflecting the
mood of the industry
10th Percentile
25th Percentile
Median
75th Percentile
90th Percentile
2011-12
10.9%
11.0%
12.0%
13.0%
14.2%
2012-13
8.9%
9.8%
11.0%
12.0%
13.3%
The industry Median for annual Increment is 11% and is

marginally lower than last year. The increments across cadres are
expected to reduce as compared to last year, pointing towards the
uncertain market sentiment
While considering the overall scenario in IT, increments have

reduced at all percentiles. This is a trend observed in many other
sectors too
The maximum drop in the annual increments for the levels is a 1.3
% point drop for middle management
Senior management seems to be the only level which hasnt seen a

drop in increment from last year. This may indicate the increasing
focus of the companies towards their senior management and it
looks like they have been rewarded for their expertise and
organizations want to retain this cadre over the long term

20%
18%
16%
13.0%
14%
11.3%
12%
10%
10.0%
10.0%
12.0%
10.0%
8%
10.0%
9.0%
6%
4%
2%
0%
JM
MM
2011-12
70
SM
2012-13
TM
The average variable pay paid out in the IT Sector is 15%

10th
25th
50th
75th
90th
JM
8.0%
10.0%
10.5%
13.5%
19.0%
MM
7.1%
10.0%
15.0%
22.5%
25.2%
SM
13.3%
15.0%
20.0%
28.0%
35.0%
TM
15.0%
17.5%
25.0%
40.0%
47.0%
The overall median variable pay stands at 15.1%
The variable pay ranges from less than 10 % to upto 50 %

across all levels, with Top and Senior management seeing the
maximum spread
Senior and Top Management have received the highest variable

pay. For the middle levels too, the variable pay has been on the
higher side

120%
100%
80%
40%
20%
11%
25%
20%
15%
0%
JM
MM
SM
71
The spread of variable pay is highest for the top

management level
TM
100%
90%
60%
80%
70%
JM
MM
SM
TM
60%
50%
40%
30%
20%
10%
0%
< 10
10 - 20
20 - 30
30 - 50
50 - 80
> 80
Variable Pay
The average variable pay paid out in the IT Sector is 15%
10th Percentile
25th Percentile
Median
75th Percentile
90th Percentile
2011-12
7.3%
12.6%
15.0%
16.0%
22.2%
2012-13
8.4%
11.9%
15.1%
19.0%
27.5%
The sector median for variable pay % is 15.1%. This is

almost similar to last years median, 15%
50%
40%
25.0%
30%
20%
10.5%
15.0%
20.0%
22%
Across all levels,

Variable pay (%) median for Top
Management is the maximum (25%) , followed by Senior
Management (20%), and then Middle (15%) & Junior
Management (10.5%)
Top Management level has received better variable pay as
compared to all other levels for the sector
15%
10%
11%
8%
0%
JM
MM
2011-12
72
SM
TM
2012-13
Top 3 HR Challenges
Better Pay
Training & Developing
Personal Reasons
Engaging People
Better utilization of current skills
Reduction in Training Programs
The Top HR priorities for 2012-13 clearly

indicates the challenges that the industry
as a whole has been facing and need to
work on
Most of the employees have given better

pay as the topmost reason to leave points
to increasing presence of MNCs with
better pay scales in the industry
Hiring of skilled talent has come up as the

most critical challenge in this sector as
the industry is in a competitive mode and
with increase in the number of IT
companies in the industry, the fight for
best talent is greater than ever
Better utilization of current skills is one of

the top attrition reasons
Training & Developing Potential Leaders

& Engaging employees come up as the
other two top concerns indicating the
concern areas where the firms need to put
in a dedicated efforts. Employees form the
basis of IT industry as it is a service
industry, training & developing employees
to keep them abreast thus forms a major
challenge
73
Employees also leave organizations for

personal reasons like marriage, relocation
etc.
Amongst all the above measures,

Outsourcing/Offshoring comes up the most
preferred way of cost optimizing
Setting up of Shared Service Centers has
come up as the second most important
option being considered in order to reduce
costs
Training programs form a huge part of the
cost for IT companies, thus, it has emerged
as one of the top three initiatives being
undertaken. Though this comes in contrast
to the fact that IT firms are also looking at
Training as an HR Challenge and want to
focus on the same
Sector Analysis
Enabled Services
Information Technology Enabled Services

Executive Summary
The median increments paid out in the Information

Technology Enabled Services Sector (12%) is
similar to overall industry increment (12%)
This is quite low as compared to last years median

(15.5%). The biggest drop in increments is seen at
the senior management level
The variable pay for ITES is the highest for the Top
management levels
The industry overall average variable pay % is

13.5%
Pursuing further studies and leaving organizations

due to better pay elsewhere has come up as one of
the major reasons for attrition
75

Sector Snapshot
BPO exports expected to reach USD 16

billion in FY2012, growing by over 12 per
Industry Overview
In the last few years, the ITES segment has been focusing on re-engineering itself in order
to deliver transformational impact to customers. BPO firms are moving from efficiency to
effectiveness
cent over FY2011
Knowledge services segment growing in

significance; fastest growing among
BPO segments at over 15 per cent; has
A Verticalised approach has been a key marketing strategy developing in-depth

capabilities across the entire value chain in specific verticals
pioneered outsourcing in areas such as
Indian ITES firms are developing future-ready solutions platform + cloud and creating
legal services
data analytics, data management and
customer impact though service delivery excellence.
They are also increasing their onshore and near-shore footprint to enable customer entry
cent, much faster than BPO industry
into local markets
Data analytics is expected to grow 19 per
average; key drivers include emergence

of analytic tools, rising volumes of data,
Firms have also been actively implementing non-linear growth initiatives that ensure higher
realizations for service providers, while controlling costs, facilitating faster time-to-market
and improving satisfaction at the clients end
increased data-driven decision making

and emergence of on-demand models
Key Challenges
Resource retention Indian ITES sector has become an HR managers nightmare.
Domestic BPO segment is expected to

grow by 17 per cent in FY2012, to reach
Unavailability of employable employees/ Lack of trained people- The supply and demand of
quality engineers who are capable of working in the ITES field is having a huge gap
`149 billion, driven by demand from
Economic slowdown IT, ITES has its revenue stream linked to the western. A slow down
there would impact Indian ITES growth and it has been a concern with many companies.
services and increasing adoption by both
voice-based (including local language)
traditional and emerging verticals,

including the government
Sources: Nasscom, Deloitte Reports
76

Participant Profile
Annual Revenue wise Breakup
Employee Strength
14.3%
28.6%
14.3%
50.0%
50.0%
14.3%
28.6%
< 100 Cr.
100 - 300 Cr.
500-1000 Cr.
> 1000 Cr.
300 - 500 Cr.
< 500
5000 - 10000
500 - 2000
10000 - 25000
2000 - 5000
> 25000
Almost all the participants in the Information Technology Enabled Services (ITES) sector were organizations with an Annual
Revenue of between `100-500 Cr
57% of the participating organizations had an employee strength of between 2000-5000 and greater than 25000 employees
77

The average increments paid out in the Information Technology Enabled Services Sector (12%), similar to that
of overall industry increment (12%)
10th
25th
50th
75th
90th
JM
9.8%
10.0%
12.0%
15.5%
16.8%
MM
10.0%
10.5%
13.0%
14.8%
15.0%
SM
10.0%
10.0%
11.0%
12.8%
14.0%
TM
7.8%
8.5%
10.0%
10.0%
12.5%
The median increment is expected to be 12% for the ITES

services, with majority of the organizations falling within the range
of 10 17%
The range of increments does not vary much across management
levels
Increment Range 2012-13

50%
40%

30%
100%
90%
13.0%
12.0%
10%
11.0%
10.0%
0%
JM
MM
SM
TM
Overall, we see Junior and Middle Management receiving greater

increments as compared to the other levels
The median increment for junior and middle management levels
is higher at 12% & 13%, whereas senior and top management
have median increment of 11% and 10% respectively
78
20%
80%
70%
JM
MM
SM
TM
60%
50%
40%
30%
20%
10%
0%
0-5
5 - 10
10 - 15
15 - 20
20 - 25
> 25
Range of Increments

The average increments paid out in the Information Technology Enabled Services Sector (12%), similar to that
of cross sector increment (12%)
10th Percentile
25th Percentile
Median
75th Percentile
90th Percentile
2011-12
9.8%
10.0%
15.5%
17.0%
18.0%
2012-13
9.8%
10.0%
12.0%
14.0%
15.0%

20%
18%
12.8%
12.0%
12%
10%

a significant drop compared to last years median (15.5%)
The increments given at 50th, 75th & 90th percentile drop

markedly if compared with increments given out last year . 10th
& 25th percentile doesnt show any change
Median for Top management has remained similar to last

years figure (10%)
15.5%
16%
14%
10.0%
12.0%
13.0%
11.0%
8%
10.0%
6%
4%
2%
0%
JM
MM
2011-12
79
SM
TM
2012-13

The variable pay is the highest for the Top management levels; Median variable pay % for Top Management
18.3%
10th
25th
50th
75th
90th
JM
10.0%
10.0%
10.0%
10.0%
11.5%
MM
11.0%
12.5%
15.0%
17.5%
19.0%
SM
12.5%
15.5%
18.5%
20.0%
21.3%
TM
15.0%
15.0%
18.3%
21.8%
22.2%
The industry overall median variable pay % is around 13.5%
Senior and Top Management have received the highest variable

pay. At the Junior level, employees/sales staff have received
better increments as the variable pay component makes up a
lesser fraction of their pay; although, the variable pay range is
quite broad for senior management level
120%
100%
80%
100%
60%
20%
18.5%
15.0%
10.0%
18.3%
0%
JM
MM
SM
TM
Majority of the companies gave their Senior Management

variable pay in the range of 10-22% but a large number were
concentrated from 15-20%
Top Management has received varied Variable pay, however
the median is 18.3 %
80
90%
40%
80%
JM
MM
SM
TM
70%
60%
50%
40%
30%
20%
10%
0%
< 10
10 - 20
20 - 30
30 - 50
50 - 80
> 80

Variable Pay
The variable pay is the highest for the Top management levels
10th Percentile
25th Percentile
Median
75th Percentile
90th Percentile
2011-12
8.2%
12.0%
14.2%
17.5%
23.4%
2012-13
12.0%
12.0%
13.5%
15.0%
15.0%
Across all levels, Variable pay (%) median for Senior

Management is the maximum (18.5%) , followed by Top
Management (18.3%), and then Middle Management (15%)
50%
40%
30%
25%
28%
20%
20%
The sector median for variable pay % is 13.5%
The Median Variable Pay as a percentage of Cost To

Company (CTC) has dropped significantly across levels
15%
18.3%
18.5%
15.0%
10%
10.0%
0%
JM
MM
2011-12
81
SM
TM
2012-13

Top 3 HR Challenges
Personal Reasons
Engaging People
Better Pay
Headcount Reduction
Retaining Critical Talent
Pursue Further Studies
Hiring and Retaining employees is what is

plaguing the sector since the last few
years. Employee engagement is an
important area of focus with most
organizations investing in programs
targeting engagement levels
To meet the hiring challenge, firms look
for graduates with good communication
skills, in large numbers, which poses a
challenge
Employee engagement is an issue due to
odd working hours and monotonous work
Retaining critical talent is a big challenge
in this sector as the employees switches
jobs frequently and also quits for further
studies
The top focus areas recognized give a
clear road map as to the critical HR
challenges for the year which need to be
dedicatedly worked upon
82
ITES industry faces the highest attrition

across sectors
Better career opportunities, further studies,
personal reasons are the most wide-spread
and important reasons for attrition in this
sector
As most of the workforce employed in this
sector is young, mostly graduates, most of
them do opt for higher education after a few
years in the industry, thus forming one of
the important reasons for attrition
It is a highly competitive market with

organization recruiting is sizeable numbers.
The same is causing a war for talent and
impacting pay. Relatively young workforce
leaving organizations for marginal increase
in pay levels
Among the above measures, Outsourcing/

Offshoring has come up as the way most
preferred by companies to optimize cost
This is closely followed by Headcount
Reduction given the large numbers
employed by this sector. ITES being a
service based industry employs large
number of people, thus most companies
during crunch period look at Headcount
reduction as one of the most feasible
options
Though Shared Service Centers and
Outsourcing involve significant initial
investment but they are investments which
save huge costs in the long run
Sector Analysis:
Media & Advertisement

Sector Snapshot
Participant Profile
Industry Overview
Television is gaining more popularity than any other media, particularly with satellite
and cable television making deeper inroads in semi-urban and rural markets; the
advertisement spends on TV are expected to grow at around 12-14%
The quality of the advertisement campaigns has improved over the years and the ad
agencies have become stronger business houses with innovative creativity as their
prime USP
33%
67%
< 100 Cr.

300 - 500 Cr.
100 - 300 Cr.

> 500 Cr.
The traditional print media in India is still playing steady - holding on in this new age of
digital content, and will see expected growth in 2012
The horizontal expansion of the newspapers will continue to grow by way of additional
supplements to the dailies in the form of pull-outs on finance, health, real estate,
entertainment etc.
Social networking have emerged as capable of rewarding media companies with new
avenues of revenue for those who dare to explore the intricate web and stay on-line
with the emerging trends on these networks
11%
45%
The Media & Entertainment industry registered a growth of 12 per cent in

2011 over 2010; TV accounted for `329 billion of revenues in 2011 and is
estimated to grow at a CAGR of 17 per cent over 2011-16
Growing regional markets are driving the pace of print media that registered
a growth of 10 per cent in 2010 and is expected to follow the similar pace till
2015
Advertising spends across all media accounted for 41 per cent of the overall
M&E industry revenues, aggregating to `300 billion while advertising
revenues witnessed a growth of 13 per cent in 2011
44%
< 500
2000 - 5000
500 - 2000
>5000
Source: Deloitte TMT Predictions Report 2011 & 2012; IBEF report
84

Annual Increments
The median increments paid out in the sector in 2012-13 is 11%; comparable to the cross sector trends
Increment Range
50%
10th
25th
50th
75th
90th
2011-12
5.0%
10.3%
10.0%
15.0%
15.9%
2012-13
8.0%
10.0%
11.0%
15.0%
15.4%
40%
30%
20%
15.0%
15.0%
12.5%
10%
12.5%
20%
Median Increments across Levels
0%
JM
MM
SM
TM
18%
The median increments paid out in the Media & Advertisement

sector in 2012-13 is 11%; a 1% points increase over last year
across levels
The spread of the increment pay range has decreased as

compared to last year, with the highest increment paid out at
20% to the junior management level and the lowest increment of
5% announced at top management level
16.0%
16%
14%
The annual increments announced for the sector in 2012-13

closely follow the industry trends
16.4%
15.0%
15.0%
15.0%
12.5%
12.5%
SM
TM
15.0%
12%
10%
8%
6%
4%
2%
0%
JM
MM
2011-12
2012-13
85

Variable Pay
The median variable pay for the sector is relatively low when compared to cross sector median pay; a
considerable 5.5% points difference
120%
10th
25th
50th
75th
90th
2011-12
3.0%
5.0%
11.0%
16.0%
20.0%
2012-13
5.0%
7.5%
10.5%
14.0%
21.2%
100%
80%
60%
40%
20%
0%
JM
MM
15.0%
10.0%
7.0%
2.5%
SM

TM
50%

40%
The median variable pay for the sector is relatively low at

10.5% of CTC as compared to cross sector median pay of
16.2% of CTC
The highest payout is expected to be at 38% at the Top

management level; few participants do not have variable pay
as a practice at junior management levels
30%
20%
The variable pay across levels for the sector have shown
marginal or no change over last year
15.0%
9.0%
10.0%
15.0%
10%
3.5%
0%
2.5%
JM
10.0%
7.0%
MM
2011-12
SM
TM
2012-13
86
Sector Analysis
Energy
Energy
Sector Snapshot
Participant Profile
Industry Overview
India is the 5th largest consumer of energy in the world and is expected to rise to 3rd
by 2030
Coal and Oil make up two-thirds of the total energy use in India
Undisclosed
participants - 2
40%
Various policies brought in by the Government to encourage further investment

across the sector such as the New Exploration Licensing Policy (NELP) and Coal Bed
Methane (CBM) Policy
India already has the worlds fifth-largest wind power capacity, and the country is the
fifth-biggest market for wind-energy generation equipment in Asia. The sector is
expected to continue to expand
60%
Key Challenges
< 100 Cr.
> 1000 Cr.
Power shortages and grid failures expected to remain common. Inadequate access to
energy of all kinds continue to hold back economic growth
Pricing structure for power is unbalanced, leading to State Electricity Boards going
bankrupt deterring increased investment from private sector when substantial
investments are actually needed
33%
Undisclosed
participants - 1
34%
The petroleum and natural gas industry in India has attracted foreign
direct investment (FDI) worth USD 3,332.78 million during April 2000 to
December 2011
33%
< 500
500 - 2000
2000 - 5000
Energy consumption in India to rise by an average of 5% a year during

2012-16 a forecast of a slow growth rate for the industry. Consumption
of Natural Gas to grow faster than that of Oil
Source: IBEF; Department of Industrial Policy & Promotion (DIPP); Economist Intelligence Unit
88
Energy
Annual Increments
Increment median for sector higher than cross-sector median; not very different from the previous year
Increment Range
50%
10th
25th
50th
75th
90th
2011-12
8.5%
12.3%
13.4%
13.8%
14.8%
2012-13
8.5%
12.4%
13.8%
14.0%
15.0%
40%
30%
20%
12.5%
10%
12.5%
12.5%
10.5%
20%
0%
18%
JM
MM
SM
TM
16%
14.0%
14.0%
12.8%
14%
The median increments in this sector are at 13.8%
12%
The increments follow a general trend line of being higher for

Junior management and progressively becoming lower till Top
Management
10%
The spread of increments is greatest at Junior management level
There is not much of a difference between increment levels

between last year and this year indicating that the sector has
not faced much turbulence or exponential growth either
10.7%
12.5%
12.5%
12.5%
10.5%
8%
6%
4%
2%
0%
JM
MM
SM
2011-12
TM
2012-13
89
Energy
Variable Pay
Variable Pay has been conservative; has increased for Junior Management and reduced for Top Management
120%
10th
25th
50th
75th
90th
2011-12
7%
11%
12.5%
15%
18%
2012-13
8.7%
10.8%
13.3%
15.9%
18.4%
100%
80%
60%
40%
20%
17.3%
14.8%
13.3%
12.3%
0%
JM
MM
SM
TM

50%

40%
Variable pay % median for the sector is at 13.3%
This is lower than the overall cross-sector median. However,

variable pay % has increased marginally at the 75th and 90th
percentiles
30%
22.5%
20%
Across levels, the variable pay % for Junior and Middle

management has increased
For Top Management, this has reduced. This may be due to
slightly slower growth rates a factor that has been forecasted to
continue in the coming years leading to organizations
performing around or just below average levels
12.3%
13.3%
14.8%
17.3%
15.0%
10%
10.5%
7.6%
0%
JM
MM
2011-12
SM
TM
2012-13
90
Contents
Survey Details
Survey Highlights
Participant List
91
PARTICIPANTS LIST
Serial No.
Company
Serial No.
Company
AAPC India Hotel Management Pvt.Ltd.
15
Axis Bank
Accenture Services Pvt. Ltd.
16
B. Braun Medical India Pvt. Ltd.
Acnielsen Org-Marg Pvt.Ltd.
17
Bangalore International Airport Limited
Aditi Technologies
18
BASF India Limited
Aditya Birla Finance Ltd.
19
Bharti Walmart Private Limited
Aditya Birla Retail Ltd.
20
Binani Group
Agfa India Pvt. Ltd.
21
Biocon Ltd.
Air Liquide Engineering India Pvt. Ltd.
22
Bosch Limited
Alere Medical Pvt.Ltd.
23
Brics Securities Limited
10
Aliens Group
24
Cambridge Solutions Ltd.
11
Anand Rathi Group
25
Castrol India Ltd.
12
Arvind Brands Limited
26
Clariant Chemicals (India) Limited
13
Ashiana Housing
27
Continental Engines Limited
14
Atlas Copco (India) Ltd.
28
Cosmo Films Ltd.
Note: Six company names have not been disclosed based on client request
92
PARTICIPANTS LIST
Serial No.
Company
Serial No.
29
CRI Pumps Private Ltd.
43
Fullerton India Credit Company Limited
30
Crimson Logic India Pvt. Ltd.
44
Future Generali India Life Insurance Co. Ltd.
31
DDB Mudra Group
45
Geojit BNP Paribas Financial Services Limited
32
Deloitte Consulting India Pvt. Ltd.
46
GMR Group
33
Deutsche Bank (India)
47
Godrej & Boyce Manufacturing Company Limited
34
DLF Pramerica Life Insurance Company Limited
48
Grail Research
35
Dr. Reddy's Laboratories (Pvt) Limited.
49
Grand Hyatt
36
Emami Limited
50
Gujarat Heavy Chemicals Limited
37
Experian Credit Information Company of India Private

Limited
51
Gupta Energy Private Ltd.
38
Fidelity Business Services India Private Limited
52
Gupta Global Resources Ltd.
39
Financial Information Network & Operations Ltd.
53
Gupta Infrastructure India Pvt. Ltd.
40
Firstsource Solutions Limited
54
GVK Power & Infrastructure Limited
41
Fortune Financial Services(Ind) Ltd.
55
HDB Financial Services Ltd
42
Fresh & Honest Caf Ltd.
56
HDFC Bank Ltd.
Company
93
PARTICIPANTS LIST
Serial No.
Company
Serial No.
Company
57
HDFC Standard Life Insurance Company Limited
71
L&T General Insurance Co. Ltd.
58
Huntsman International (India) Private Ltd.
72
Leo Burnett
59
iGATE Patni
73
Lloyd's Register Asia
60
IL&FS Investment Managers Limited
74
Lodha Group
61
Indraprastha Gas Limited
75
Lonza India Pvt. Ltd.
62
IndusInd Bank Limited
76
LOREAL India Pvt. Ltd.
63
ING Vysya Bank Ltd.
77
LT Foods Ltd.
64
Ingenero Technologies (India) Pvt. Ltd.
78
Lupin Ltd.
65
International Asset Reconstruction Company Private

Limited
79
Magma Fincorp Limited
66
International Speciality Products (india) Pvt. Ltd.
80
Mahindra & Mahindra Financial Services Limited
67
Kansai Nerolac paints Ltd.
81
Mahindra Holidays & Resorts India Ltd.
68
Kodak India Pvt. Ltd.
82
Marathon Realty Pvt. Ltd.
69
Kongsberg Maritime India Private Limited
83
Marks and Spencer (India)
70
L&T Finance Limited
84
Mecklai Financial Services Ltd.
94
PARTICIPANTS LIST
Serial No.
Company
Serial No.
Company
85
Mercator Ltd.
99
Polyplex Corporation Ltd.
86
Merck Limited
100
Promed Exports Pvt. Ltd.
87
Metro Shoes Ltd.
101
Quatrro Global Services Pvt. Ltd.
88
Micro Turners I
102
Rane Group
89
Mizuho Corporate Bank Ltd.
103
Royal Bank of Scotland
90
Moser Baer India Ltd.
104
S M Creative Electronics Ltd.
91
MSPL Limited
105
Samsonite South Asia Pvt. Ltd.
92
Mumbai International Airport Pvt. Ltd.
106
Shapoorji Pallonji Group
93
Nashik Vintners Pvt. Ltd.
107
Sharekhan
94
NIIT Technologies Ltd.
108
SKF India Limited
95
Orchid Chemicals & Pharmaceuticals Ltd.
109
SMC Investments and Advisors Limited
96
Pearson Education (India)
110
Star India Private Limited
97
Pfizer India Ltd.
111
Stock Holding Corporation of India Ltd
98
Pitti Laminations
112
Super Religare Laboratories Limited
95
PARTICIPANTS LIST
Serial No.
Company
Serial No.
113
Sweta Estates Pvt. Ltd.
127
Theorem Clinical Research
114
Syntel Limited
128
ThoughtWorks Technologies (India) Pvt Ltd.
115
Synthite Industries Ltd.
129
V.I.P. Industries Limited
116
Tahiliani Designs Pvt. Ltd.
130
Vestas Wind Technology India Private Limited
117
Talisma Corporation Pvt. Ltd.
131
Voltas Limited
118
Tata Capital Ltd.
132
Welpsun India Ltd.
119
Tata Chemicals Ltd.
133
Willis Processing Services (India) Pvt. Ltd.
120
Tata Consultancy Services
134
Wipro Technologies
121
Tata Housing Development Company Ltd.
135
XLHealth Corporation India Private Limited
122
Tata Power Company
136
Zenta India Private Limited
123
Tata Services
124
TCS E-Serve Limited
125
The Great Eastern Shipping Company Limited
126
The Himalaya Drug Company
Company
96
Key Contacts
P Thiruvengadam
Pooja Karopady
National Practice Leader
Senior Consultant
Direct: +91 80 6627 6108
Board: + 91 22 6619 8600, Mobile: +91 98196 18761
Email pthiruvengadam@deloitte.com
Email pkaropady@deloitte.com
Dr. Vishalli S Dongrie
Roy Lobo
Indrani Haldar
Senior Director
Senior Consultant
Consultant
Direct: +91 22 6619 8832, Mobile: +91 98339 73458
Direct: + 91 22 6619 8656, Mobile: +91 99209 14729
Board: + 91 22 6619 8600, Mobile: +91 96191 57525
Email vdongrie@deloitte.com
Email roylobo@deloitte.com
Email ihaldar@deloitte.com
Priyanka Taranekar
Gaurav Warudi
Mumal Singh
Manager
Consultant
Consultant
Direct: + 91 22 6619 8813, Mobile: +91 98673 05893
Board: + 91 22 6619 8600, Mobile: +91 98605 84841
Board: + 91 22 6619 8600, Mobile: +91 99302 19183
Email ptaranekar@deloitte.com
Email gwarudi@deloitte.com
Email mumalsingh@deloitte.com
97
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an exhaustive treatment of such subject(s). None of DTTIPL, Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the Deloitte Network) is, by means of this material,
rendering professional advice or services. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any
action that might affect your personal finances or business, you should consult a qualified professional adviser.
No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this material.
2012 Deloitte Touche Tohmatsu India Private Limited. Member of Deloitte Touche Tohmatsu Limited. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by
guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche
Tohmatsu Limited and its member firms.
This material and the information contained herein prepared by Deloitte Touche Tohmatsu India Private Limited (DTTIPL) is intended to provide general information on a particular subject or subjects and is not
an exhaustive treatment of such subject(s). None of DTTIPL, Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the Deloitte Network) is, by means of this material,
rendering professional advice or services. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any
action that might affect your personal finances or business, you should consult a qualified professional adviser.
No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this material.
2012 Deloitte Touche Tohmatsu India Private Limited. Member of Deloitte Touche Tohmatsu Limited.

Compensation Trends Survey 2012

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Compensation Trends Survey 2012

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Compensation Trends Survey 2012

Overall Industry Analysis

Detailed Sectoral Analysis

2012 Deloitte Touche Tohmatsu India Private Limited

Elements detailed in the Compensation Trends

Salary Increase for 2012 2013

2012 Deloitte Touche Tohmatsu India Private Limited

Data Collection &

2012 Deloitte Touche Tohmatsu India Private Limited

Consumer Business & Retail

Energy & Resources

Media & Advertising

Pharmaceuticals, HealthCare &

2012 Deloitte Touche Tohmatsu India Private Limited

100 - 300 Cr.

300 - 500 Cr.

> 1000 Cr.

Gross revenue of majority of the organizations (~50%) is over `1000 crores

2012 Deloitte Touche Tohmatsu India Private Limited

Overall Industry Analysis

Detailed Sectoral Analysis

2012 Deloitte Touche Tohmatsu India Private Limited

Overall median salary increase across sectors is 12%

2012 Deloitte Touche Tohmatsu India Private Limited

Overall Industry Analysis

Detailed Sectoral Analysis

2012 Deloitte Touche Tohmatsu India Private Limited

Overall Industry Analysis

Source: ** Economic Survey 2011 2012

2012 Deloitte Touche Tohmatsu India Private Limited

Overall Industry Analysis

Infrastructure & Pharmaceuticals,

2012 Deloitte Touche Tohmatsu India Private Limited

Overall Industry Analysis

The 12% increment is almost standard across the cadres

Level-wise frequency distribution

Top Max; Bar Median; Bottom - Min

The Increment Range is wider at top management levels

2012 Deloitte Touche Tohmatsu India Private Limited

Overall Industry Analysis

Median Increment Across Levels

Increment figures were conservative as compared to last

The overall median has dropped one percentage point to

Median annual increment percentages dropped across

2012 Deloitte Touche Tohmatsu India Private Limited

Overall Industry Analysis

The average Variable Pay across all industries is 16%

2012 Deloitte Touche Tohmatsu India Private Limited

Overall Industry Analysis

In a growing economy, the role of Senior and Top management

Variable Pay (as % of CTC) Range

Level-wise frequency distribution

Top Max; Bar Median; Bottom - Min

The spread in the variable pay range is seen highest at the

Range of Variable Pay

2012 Deloitte Touche Tohmatsu India Private Limited

Overall Industry Analysis

The spread of variable pay range has shown a considerable

Median Annual Variable Pay (as % CTC)

The higher payout is expected to be at 30% as compared to

The median variable pay remains the same as compared to last

2012 Deloitte Touche Tohmatsu India Private Limited

Overall Industry Analysis

Infrastructure & Pharmaceuticals,