Survey On Compensation Trends

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 Analysis
2012 13 Compensation Trends Survey Report
Survey Details Participant Profile

Industry-wise participation
7.4% 8.5% 10.6% 4.4%
Consumer Business & Retail

Energy & Resources Financial Services Information Technology
5.6%
23.2%
Information Technology 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%
34.1%
17.6%
500 - 2000
2000 - 5000
5000 - 10000
10000 - 25000
100 - 300 Cr.
300 - 500 Cr.
500-1000 Cr.
> 1000 Cr.
Undisclosed participants: 16
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
Overall Industry Analysis 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
Overall Industry Analysis Annual Increment Trends

18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 16% 12% 11% 12% 15% 15% 12% 12% 13% 12% 12% 10% 13% 15% 13% 14% 10% 11% 13% 12%
Information Technology
Information Technology Enabled Services
Infrastructure & Pharmaceuticals, Real Estate HealthCare & LifeSciences
Consumer Business & Retail
Financial Services
Manufacturing
Energy & Resources
Media & Advertising
Other(s)
2011-12
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
Overall Industry Analysis Annual Increment 2012-13

Increments are expected to be conservative, attributable to the overall economic conditions
Increment Percentiles
10th JM MM SM TM 10.0% 9.0% 7.6% 7.5% 25th 10.0% 10.0% 10.0% 9.8% 50th 12.0% 12.0% 11.0% 10.0% 75th 15.0% 14.6% 13.8% 12.6% 90th 15.0% 15.5% 15.0% 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% 30% 20% Percentage of Companies 10% 0% JM 12% 12% 11% 10% 100% 90% 80%
Level-wise frequency distribution
70% 60%
50% 40% 30% 20% 10% 0% 0-5 5 - 10 10 - 15 15 - 20 20 - 25 > 25 Range of Increments JM MM SM
MM
SM
TM
Top Max; Bar Median; Bottom - Min
TM
The Increment Range is wider at top management levels as compared to junior levels
Please Note: JM Junior Management; MM Middle Management; SM Senior Management; TM Top Management
12
Overall Industry Analysis Annual Increment Trends

Increments are expected to be conservative, attributable to the overall economic conditions
10th Percentile 2011-12 2012-13 10.0% 9.0%
25th Percentile 11.0% 10.0%
Median 13.0% 12.0%
Median Increment Across Levels

20% 18% 16% 14% 12.5% 12.0% 12.3% 12.0% 11.0% 12.0% 11.2% 10.0%
Increment figures were conservative as compared to last year with a marginal drop across all percentiles The overall median has dropped one percentage point to 12% Median annual increment percentages dropped across levels; the reduction is highest at top management levels by nearly 1.2% points
12%
10% 8% 6% 4% 2% 0% JM MM SM TM
2011-12
2012-13
13
Overall Industry Analysis Annual Variable Pay Trends

25% 22% 20% 20%
20%
15% 15% 15% 14% 14% 15% 15%
18%
15%
17%
18%
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 Manufacturing Energy & Resources Media & Advertising
2011-12
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 s ame 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
Overall Industry Analysis Variable Pay 2012-13

Trend shows overall decrease in Variable pay across industries
Variable Pay Percentiles
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% 60% 40% 14% JM MM 15% SM % of Companies 20% 0% TM 20% 23% 100% 90% 80% 70% 60% 50% 40% 30%
JM MM SM TM
20%
Majority of the companies gave variable pay in the range of 1030%; with few exceptions The spread in the variable pay range is seen highest at the middle and senior management levels
15
10% 0% < 10 10 - 20 20 - 30 30 - 50 50 - 80 > 80
Range of Variable Pay
Overall Industry Analysis Variable Pay Trends

Trend shows overall decrease in Variable pay across industries
10th Percentile 2011-12 2012-13 9.0% 8.9% 25th Percentile 12.0% 12.0% Median 16.0% 16.2% 75th Percentile 26.0% 20.0 % 90th Percentile 41.0% 30.1%
Median Annual Variable Pay (as % CTC)

50% 40% 30% 20.0% 20% 10% 0% JM MM SM TM 15.0% 15.1% 19.0% 14.0% 14.0% 22.5% 25.0%
The spread of variable pay range has shown a considerable decrease as compared to 2011 -12 Across all industries, the variable pay has reduced most for Top Management by 2.5% points The higher payout is expected to be at 30% as compared to 41% last year The median variable pay remains the same as compared to last year
2011-12
2012-13
16
Overall Industry Analysis Attrition Analysis

40% 35% 30% 25% 20% 15% 10% 5% 0% Information Technology Information Technology Enabled Services Infrastructure & Pharmaceuticals, Real Estate HealthCare & LifeSciences Consumer Business & Retail Financial Services Manufacturing Energy & Resources Media & Advertising Other(s)
17% 11% 11% 8% 17% 12% 15% 11% 7% 4% 1% 34% 25% 22% 23% 18%
22% 16% 12% 10% 8% 13% 8% 8% 11%9% 7% 6% 10% 11% 8% 4%
22% 20% 16% 14% 10% 14% 13% 9%
JM
MM
SM
TM
Attrition continues to remain a key area of concern in the Indian industry 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% Manufacturing and Energy & Resources faced lowest overall attrition at 8% The most prevalent reason employees leave organizations is better pay elsewhere Many employees are also seeking to upgrade their current skillsets and are leaving organizations to pursue further studies in India and abroad 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
2 Personal reasons
Top Attrition Challenges
Better pay elsewhere
Pursue further studies
17
Overall Industry Analysis Human Capital Trends

Human Resource Challenges Cost Optimization Measures
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 The competitive market is a key contributor to the same Ability to develop managers who will be able to take up potential leadership positions, also seems a significant cause of concern
Cost optimization measures have become increasingly important given the current economic scenario 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 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
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
Contents
Survey Details
Survey Highlights
Participant List
19
Sector Analysis: Consumer Business & Retail
Consumer Business & Retail Executive Summary

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
21
Consumer Business & Retail 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 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
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
Consumer Business & Retail Participant Profile
Service wise Breakup
Revenue wise Breakup
Employee Strength wise Breakup

8% 8% 8% 9% 25%
18%
40% 60%
46%
36% 42%
Consumer Business
Retail
< 100 Cr. 500-1000 Cr.
100 - 500 Cr. > 1000 Cr.
< 500 2000 - 5000 10000 - 25000
500 - 2000 5000 - 10000 > 25000
Undisclosed Participants:
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
Consumer Business & Retail Annual Increment 2012-13

Increments have been conservative; organizations remain cautious due to the prevailing low consumer confidence Increment Percentiles
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 their employees in the range of 9-15%, across all levels Junior, Middle, Senior & Top Management
Increment Range
50% 40% 100% 30% 90% 20% 10% 0% JM MM SM TM 10.0% Percentage of Companies 80%
12.0%
12.0%
11.8%
70% 60% 50% 40% 30% 20% 10% 0% 0-5 5 - 10 10 - 15 15 - 20 20 - 25 > 25
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
24
Range of Increments Please Note: JM Junior Management; MM Middle Management; SM Senior Management; TM Top Management
Consumer Business & Retail Annual Increment Trends

Annual increment have dropped by 1-2% points across levels, with maximum impact at top management levels
10th Percentile 2011-12 2012-13
25th Percentile
Median
75th Percentile
90th Percentile
10.0% 9.0%
11.0% 10.8%
13.2% 12.0%
16.0% 12.8%
17.1% 15.3%
20%
Median Increments Across Levels
18% 16%
14% 12% 10% 8% 6% 4% 2% 0% JM MM 2011-12 SM 2012-13 TM 12.0% 12.0% 11.8% 10.0% 13.0% 13.3% 13.4% 13.5%
Increments this year have been conservative attributable to the prevalent market sentiment Higher increments are expected to be around 15% as against 17% last year, a significant 2 % points drop Median annual increment percentages dropped across levels; the reduction is highest at top management levels by nearly 3.5% points
25
Consumer Business & Retail Variable Pay 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
The sector median variable pay stands at 18.2%; higher than the overall industry median
JM
MM SM TM
10.0% 10.0% 11.4% 15.6%
10.0% 11.5% 15.2% 19.5%
15.0% 14.0% 19.0% 25.0%
18.5% 18.5% 25.0% 26.3%
20.0% 21.2% 27.1% 36.0%
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
Level wise Frequency Distribution
60% Percentage of Companies 50% 40% 30% 20% 10% 0%

120% 100% 80%
60%
40% 20% 0% JM MM SM TM 15.0% 25.0%
14.0%
19.0%
JM MM SM TM
< 10 10 - 20 20 - 30 30 - 50 50 - 80 > 80
Majority of the companies gave variable pay in the range of 1020%; with few exceptions The spread in the variable pay range is seen highest at the top management levels
26
Consumer Business & Retail Variable Pay Trends

Senior and Top management levels have experienced significant drop in the variable pay
10th Percentile 2011-12 2012-13 12.0% 10.0% 25th Percentile 15.0% 14.3% Median 17.0% 18.2% 75th Percentile 28.0% 19.0% 90th Percentile 50.0% 28.0%

50%
40%
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 At median, the variable pay percentage has increased indicating that increasing imperative of performance based pay across cadres is necessary to remain competitive A higher payout is expected to be around 30% as compared to 50% last year
19.5%
30% 19.0% 20% 15.0% 14.0%
25.0%
16.0%
10% 10.0% 0% JM MM SM TM 11.5%
2011-12
2012-13
27
Consumer Business & Retail Human Capital Trends

Human Resource Challenges Reasons for Attrition Cost Optimization Measures
Hiring talent
Better pay
Engaging people
Career options
3 Training & development of potential leaders
Personal Reasons
Freeze on company travel
High employee turnover in this sector has made Engaging and Retaining talent a perennial burning priority in this sector With customer experience becoming a prime differentiator for a company in this sector, the training and engagement of the workforce has become critical 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
Attrition is a challenge faced by this sector primarily in the Junior Management level and in the Sales roles While organizations try and pay competitively, they are still losing employees to better pay elsewhere 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
28
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) 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
Performance Highlights The business expectation index (BEI), which acts as a
barometer of the overall

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
RBI expects it at 117.2 for the January-March 2012
quarter
Manufacturing exports from India could increase from USD 40 billion to about USD 300 billion by 2015. This would make India rake-in a share of approximately 3.5 per cent in the world manufacturing trade
Sources: Economist Intelligence Unit; IBEF;
Consolidated FDI Policy, Department of Industrial Policy & Promotion (DIPP); Media Reports
Key Challenges
The country would need to fully leverage the opportunities provided by the dynamics of globalization 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 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
31
Manufacturing Participant Profile
Annual Revenue wise Break up Annual Revenue Wise Break Up

9%
Employee Strength
12%
18%
5%
14% 8%
23%
72% 38%
100-300cr
300-500cr
500-1000cr
>1000cr
<500
500-2000
10000-25000
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 JM MM SM TM 25th 50th 75th 90th
10.0% 10.0% 7.6% 7.5%
12.0% 12.0% 10.0% 10.0%
14.0% 15.0% 13.0% 13.0%
15.3% 15.5% 15.0% 15.0%
18.0% 18.0% 15.9% 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% 20% 10% 0% JM MM SM TM 14% 15% 13% 13% Percentage of Companies 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0-5 5 - 10 10 - 15 15 - 20 20 - 25 > 25 Range of Increments
Top Max; Bar Median; Bottom Min
JM MM SM TM
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
33
Manufacturing Annual Increments Trends

Increments at the median level (15%) have increased considerably compared to last year (12.3%)
10th Percentile
2011-12 2012-13 9.3% 9.0%
25th Percentile
12.0% 12.0%
Median
12.3% 15.0%
75th Percentile
14.0% 15.0%
90th Percentile
17.7% 17.0%

20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 13.4% 14.0% 13.0% 14.0% 15.0% 14.0% 13.0%
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% 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% 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
0%
JM MM SM TM
2011-12
2012-13
34
Manufacturing Variable Pay 2012-13

Variable pay % in the manufacturing sector (20%) is above the overall cross-sector benchmark of 16.2%
10th JM MM 25th 50th 75th 90th
The industry median variable pay % is around 20% which is higher than the overall industry benchmark of 16.2% Top Management has received the highest Variable Pay 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
10.0% 10.6% 13.5% 15.0%
10.0% 14.4% 15.0% 20.0%
15.0% 15.0% 20.0% 21.8%
20.0% 22.9% 30.0% 28.0%
29.3% 28.5% 30.0% 34.5%
SM
TM
120% 100% 80% 60% 40% 20% 0%

15% JM MM 15% SM 20% TM Percentage of Companies 22% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% < 10 10 - 20 20 - 30 30 - 50 50 - 80 > 80
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%
JM MM SM TM
The Senior Management have received variable pay in the range between 9% to 40%

35
Manufacturing Variable Pay

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

50% 40% 30% 20.0% 20% 10% 22% 21.8% 15% 15.0%
The sector median for variable pay % is 20%. This is higher than the median for last year which was at 12.5%
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%
The median variable pay % has shown an increase across all levels except Top Management, where it is nearly constant as compared to last year.
15.0%
11%
8% 0% JM MM SM TM
2011-12
2012-13
36
Manufacturing Human Capital Trends

Top 3 HR Challenges
Training & developing potential leaders Retaining of Critical Talent
Key Reasons for Attrition
Cost Optimization Measures
Better Pay
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
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
37
Sector Analysis Infrastructure & Real Estate
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
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Infrastructure & Real Estate 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
Performance Highlights 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
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
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Infrastructure & Real Estate Participant Profile
Annual Revenue wise Break up

11%
Employee Strength
11% 22%
22%
11% 45% 45% 11% 22%
< 100 Cr. 300 - 500 Cr.
> 1000 Cr. 500-1000 Cr.
100 - 300 Cr.
< 500 2000 - 5000
> 25000 500 - 2000
10000 - 25000 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
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Infrastructure & Real Estate Annual Increments 2012-13

Annual Increment median for this sector is at 15%
50% 40% 30% 20% 10% 0% JM MM SM TM 12.5% 12.5% 15.0% 10.0%
Increment Range
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

100% 90%
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 However, increment levels have fallen this year as compared to last year
Percentage of Companies
80% 70% 60% 50%
JM MM SM TM
40%
30% 20% 10%
0%
0-5
5 - 10
10 - 15
15 - 20
20 - 25
> 25
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Infrastructure & Real Estate Annual Increments Trends

Annual Increments have reduced compared to last year; median increment for this sector still high compared to overall cross-sector median for annual increment
10th Percentile
2011-12 2012-13 12.1% 6.4%
25th Percentile
13.6% 10.0%
Median
15.0% 15.0%
75th Percentile
19.6% 15.9%
90th Percentile
21.8% 16.8%
20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0%

15.0% 15.0% 15.5% 12.6% 15.0% 12.5% 12.5% 10.0%
The industry Median for annual Increment % is 15%. This is higher than the overall annual increment % median (12%) 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
JM
MM
SM
TM
2011-12
2012-13
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Infrastructure & Real Estate Variable Pay 2012-13

Variable Pay is not a sector-wide practice
120%
100% 80% 60% 40% 20% 12.2% 0% JM MM SM TM 20.0% 20.0%
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.
15.1%
Top Max; Bar Median; Bottom Min 100%
Level-wise Frequency Distribution

90% 80% Percentage of Companies 70%
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%
60%
50% 40% 30% 20% 10% 0%
JM MM SM TM
<10
10-20
20-30
30-50
50-80
>80
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Infrastructure & Real Estate Variable Pay

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

50% 40% 30% 20% 20% 12% 10% 10% 0% JM MM SM TM 12% 16% 15% 20% 20%
2011-12
2012-13
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
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Infrastructure & Real Estate Human Capital Trends

Top 3 HR Challenges Key Reasons for Attrition Cost Optimization Measures
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
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
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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
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Pharmaceuticals, Healthcare & Life Sciences 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
Performance Highlights The industry stands at USD 36 billion today and is expected to grow at 15% per annum 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
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 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
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Pharmaceuticals, Healthcare & Life Sciences Participant Profile

Annual Revenue wise Break up Employee Strength
9% 9%
9% 15%
8% 23%
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
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Pharmaceuticals, Healthcare & Life Sciences Annual Increments 2012-13

The increments in the Healthcare sector are amongst the lowest across all sectors for 2012 2013
Increment Range
50% 40% 30% 20% 10% 0% JM MM SM TM 12.0% 12.0% 12.0% 12.0%
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%

100% 90% Percentage of Companies
Majority of Health Care companies have given increments to all their employees in the range of 10-14%, across all levels 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)
80% 70% 60% 50% 40% 30% 20% 10% 0% 0-4 5-9 10-14 15-19 20-24 >25
JM MM SM TM
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Pharmaceuticals, Healthcare & Life Sciences Annual Increments Trends

The median increment in the Healthcare sector is at 12% for 2012-13
10th Percentile
2011-12 2012-13 10.0% 10.4%
25th Percentile
10.3% 11.5%
Median
12.0% 12.0%
75th Percentile
14.0% 12.8%
90th Percentile
14.7% 13.8%
20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0%
The industry Median for annual Increment % is 12%. This is 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
12%
12%
12%
12% 10%
JM
MM
SM
TM
2011-12
2012-13
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Pharmaceuticals, Healthcare & Life Sciences Variable Pay 2012-13

Variable Pay has a wide range across levels; not necessarily a sector-wide practice
120% 100% 80% 60%
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
40% 20% 10.2% 0% JM MM SM TM 15.0% 20.0% 20.0%

100% 90% 80% % of Companies
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%
70%
60% 50% 40% 30% 20% 10% 0% <10 10-20 20-30 30-50 50-80 >80 JM MM SM TM
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Pharmaceuticals, Healthcare & Life Sciences Variable Pay

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

50% 40% 30% 20% 20% 11% 10% 0% JM MM SM TM 25%
The sector median for variable pay % is 15%. This is below the overall industry median variable pay % at 16.2%
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%
20%
The variable pay for this sector is the lowest at Junior and Middle Management levels
2011-12
2012-13
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Pharmaceuticals, Healthcare & Life Sciences Human Capital Trends

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
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
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Sector Analysis: Financial Services
Financial Services Executive Summary

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
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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 Performance Highlights
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%
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
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Financial Services Participant Profile
Service wise Breakup
Revenue wise Breakup

7% 14% 29%
17% 31% 25% 35% 11%
22%
16%
28%
17%
9%
18%
21%
Bank Insurance
Capital Market NBFC
< 100 Cr. 300 - 500 Cr. > 1000 Cr.
100 - 300 Cr. 500-1000 Cr.
< 500 2000 - 5000 10000 - 25000
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
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Financial Services Annual Increment 2012-13

The annual increments have been somber with few participants having decided against any increments
10th JM MM SM TM 8.1% 25th 10.0% 50th 10.0% 75th 12.7% 90th 15.0%
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
7.6%
7.1% 5.4%
9.5%
8.0% 7.4%
10.0%
10.0% 9.3%
11.3%
10.0% 10.0%
12.4%
12.2% 11.0%
Increment Range
50% 40% 30% 20% 10% 0% JM MM SM TM 10.0% 10.0% 10.0% 9.3% Percentage of Companies 100% 90% 80% 70% 60% 50% 40% 30% 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
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
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Financial Services Annual Increment Trends

Companies restricted increments for employees falling in the higher pay bracket; percentage to drop significantly at the senior levels
10th Percentile 2011-12 2012-13 25th Percentile Median 75th Percentile 90th Percentile
10.0% 7.6%
11.0% 9.3%
12.5% 10.0%
15.0% 11.0%
18.2% 12.9%
20%
18%
16% 14% 12% 10% 8% 6% 4% 2% 0% JM MM SM TM 10.0% 10.0% 10.0% 9.3% 12.5% 13.0% 12.0% 11.4%
2011 2012 was a relatively subdued year for the economy with most of the companies treading on the side of caution The increments announced this year is substantially low by 3-4% points compared to last year, indicating less take home for the employees Increments across cadres will reduce to the tune of 2% points as compared to last year 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
2011-12
2012-13
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Financial Services Variable Pay 2012-13

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 11.5% 14.8% 16.5% 20.5% 50th 15.0% 20.0% 22.0% 25.0% 75th 22.5% 31.3% 26.3% 30.0% 90th 53% 71% 52% 40%
Majority of the companies gave variable pay in the range of 2025%; with few exceptions
JM
MM SM TM
10.0% 12.3% 13.6% 14.7%
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
100% 90%
Variable Pay (% CTC) Range

120%
100%
80% 60% 40% 20% 0% JM MM SM TM 15.0% 20.0% 22.0% 25.0% % of Companies
80%
70% 60% 50% 40% 30%
JM MM SM TM
Payout distinctly differs within business segments in financial services such as Banking, Insurance, Capital markets and NBFCs An indicator of the high caution levels within the financial services organizations, and an effort to bring in more accountability for sustainable performance
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20% 10% 0% < 10 10 - 20 20 - 30 30 - 50 50 - 80 > 80 Range of Variable Pay
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 2011-12 3.0% 25th Percentile 14.0% 75th Percentile 45.0% 90th Percentile 74.0%
Median 22.3%
2012-13
13.1%
15.8%
20.0%
26.3%
48.0%

50%
40%
38.0%
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 The variable pay announced this year is substantially low as compared to last year 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
30% 20.0% 20%
28.0%
25.0% 15.0% 20.0% 15.0%
22.0%
10%
0% JM MM SM TM
2011-12
2012-13
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Financial Services Human Capital Trends

Human Resource Challenges Reasons for Attrition Cost Optimization Measures
Hiring talent
Better pay
Retaining People Training & development of potential leaders
Personal Reasons
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 Every competitor is looking for the highest quality employee. Skilled talent hiring, retention and development is critical is a priority for this sector 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 There is also a need to develop potential leaders to assume leadership positions in the organization in the long term
The sector is heavily dependent on skilled manpower, strong customer relationships and efficient customer service A good employee is an asset to the companies and every company in the market is looking for the highest quality employee 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 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
64
Sector Analysis Information Technology
Information Technology 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
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Information Technology Sector Snapshot

Performance Highlights
Industry Overview
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
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
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
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.
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
Sources: Nasscom; Deloitte Reports
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Information Technology Participant Profile

Annual Revenue wise Breakup Employee Strength
14.3% 20.0%
42.9%
28.6%
80.0% 14.3%
< 100 Cr. 500-1000 Cr.
100 - 300 Cr. > 1000 Cr.
300 - 500 Cr.
< 500 5000 - 10000
500 - 2000 10000 - 25000
2000 - 5000 > 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
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Information Technology Annual Increments 2012-13

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 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% 30% 100% 90% Percentage of Companies 12.0% 10.0% MM SM 10.0% TM 80% 9.0% 70% 60% 50% 40% 30% 20% 10% 0% 0-5 5 - 10 10 - 15 15 - 20 20 - 25 > 25 Range of Increments
20%
10% 0% JM
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
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JM MM SM TM
Information Technology Annual Increments Trends

The increments paid out in the Information Technology Sector have been conservative this year, reflecting the mood of the industry
10th Percentile
2011-12 2012-13 10.9% 8.9%
25th Percentile
11.0% 9.8%
Median
12.0% 11.0%
75th Percentile
13.0% 12.0%
90th Percentile
14.2% 13.3%

20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% JM MM SM TM 12.0% 10.0% 10.0% 9.0% 13.0% 11.3% 10.0% 10.0%
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
2011-12
2012-13
70
Information Technology Variable Pay 2012-13

The average variable pay paid out in the IT Sector is 15%

10th JM MM SM TM 8.0% 7.1% 13.3% 15.0% 25th 10.0% 10.0% 15.0% 17.5% 50th 10.5% 15.0% 20.0% 25.0% 75th 13.5% 22.5% 28.0% 40.0% 90th 19.0% 25.2%
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
35.0% 47.0%

120% 100% 80% 60% 40% 20% 11% 15% MM SM 20% TM 25% Percentage of Companies 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% < 10 10 - 20 20 - 30 30 - 50 50 - 80 > 80
0%
JM
JM MM SM TM
The spread of variable pay is highest for the top management level
71
Information Technology Variable Pay

The average variable pay paid out in the IT Sector is 15%
10th Percentile
2011-12
2012-13 7.3% 8.4%
25th Percentile
12.6% 11.9%
Median
15.0% 15.1%
75th Percentile
16.0% 19.0%
90th Percentile
22.2% 27.5%

50%
The sector median for variable pay % is 15.1%. This is almost similar to last years median, 15%
40%
30%
15.0% 20.0%
25.0%
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
20%
10.5%
22% 15% 11%
10% 8% 0% JM MM
SM
TM
2011-12
2012-13
72
Information Technology Human Capital Trends

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 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 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
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 Better utilization of current skills is one of the top attrition reasons 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
73
Sector Analysis Information Technology 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
Information Technology Enabled Services Sector Snapshot
Performance Highlights
BPO exports expected to reach USD 16 billion in FY2012, growing by over 12 per
Industry Overview
cent over FY2011
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
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 Indian ITES firms are developing future-ready solutions platform + cloud and creating customer impact though service delivery excellence.
pioneered outsourcing in areas such as data analytics, data management and legal services Data analytics is expected to grow 19 per cent, much faster than BPO industry
They are also increasing their onshore and near-shore footprint to enable customer entry into local markets
average; key drivers include emergence

of analytic tools, rising volumes of data, increased data-driven decision making and emergence of on-demand models
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
Key Challenges
Domestic BPO segment is expected to grow by 17 per cent in FY2012, to reach
Resource retention Indian ITES sector has become an HR managers nightmare. 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 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.
`149 billion, driven by demand from

voice-based (including local language) services and increasing adoption by both traditional and emerging verticals, including the government
Sources: Nasscom, Deloitte Reports
76
Information Technology Enabled Services Participant Profile

Annual Revenue wise Breakup Employee Strength
14.3% 28.6%
14.3% 50.0% 50.0%
14.3% 28.6%
< 100 Cr. 500-1000 Cr.
100 - 300 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
Information Technology Enabled Services Annual Increments 2012-13

The average increments paid out in the Information Technology Enabled Services Sector (12%), similar to that of overall industry increment (12%)
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% 20% 10% 0% JM MM SM TM 12.0% 11.0% 10.0% Percentage of Companies 13.0% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0-5 5 - 10 10 - 15 15 - 20 20 - 25 > 25 Range of Increments
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
Information Technology Enabled Services Annual Increments Trends

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

20% 18% 16% 15.5% 12.8% 13.0% 11.0% 10.0% 12.0% 10.0% 12.0%
The industry Median for annual Increment % is 12%. This is 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%)
14%
12% 10% 8% 6% 4% 2% 0%
JM
MM
SM
TM
2011-12
2012-13
79
Information Technology Enabled Services Variable Pay 2012-13

The variable pay is the highest for the Top management levels; Median variable pay % for Top Management 18.3%
10th 25th 10.0% 12.5% 15.5% 15.0% 50th 10.0% 15.0% 18.5% 18.3% 75th 10.0% 17.5% 20.0% 21.8% 90th 11.5% 19.0% 21.3% 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
JM
MM SM TM
120% 100% 80% 60% 40% 20%
10.0% 11.0% 12.5% 15.0%

100% 90% Percentage of Companies 80% 70% 60% 50% 40% 30% 20% 10% 0% < 10 10 - 20 20 - 30 30 - 50 50 - 80 > 80 Range of Variable Pay
10.0% 0% JM MM
15.0% SM
18.5%
18.3%
TM
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
Information Technology Enabled Services Variable Pay

The variable pay is the highest for the Top management levels
10th Percentile
2011-12
2012-13
25th Percentile
12.0%
12.0%
Median
14.2%
13.5%
75th Percentile
17.5%
15.0%
90th Percentile
23.4%
15.0%
8.2%
12.0%

50% 40% 30% 20% 20% 10% 0% JM MM SM TM 15% 15.0% 10.0% 18.5% 18.3% 25%
The sector median for variable pay % is 13.5% 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%)
28%
The Median Variable Pay as a percentage of Cost To Company (CTC) has dropped significantly across levels
2011-12
2012-13
81
Information Technology Enabled Services Human Capital Trends

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
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
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
Sector Analysis: Media & Advertisement
Media & Advertisement Sector Snapshot

Participant Profile Revenue wise Breakup
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%
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 Performance Highlights
< 100 Cr. 300 - 500 Cr.
100 - 300 Cr. > 500 Cr.

11%
45% 44%
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
< 500 2000 - 5000 500 - 2000 >5000
Source: Deloitte TMT Predictions Report 2011 & 2012; IBEF report
84
Media & Advertisement Annual Increments

The median increments paid out in the sector in 2012-13 is 11%; comparable to the cross sector trends
Increment Range
50%
Increment Percentiles 10th 25th 10.3% 10.0% 50th 10.0% 11.0% 75th 15.0% 15.0% 90th 15.9% 15.4%
40% 30% 20% 15.0% 10% 0% JM MM SM TM 18% 16% 16.4% 15.0% 12.5% 12.5% 20%
2011-12 2012-13
5.0% 8.0%
Median Increments across Levels

16.0% 15.0% 15.0% 15.0% 12.5% 12.5% 15.0%
14%
The annual increments announced for the sector in 2012-13 closely follow the industry trends The median increments paid out in the Media & Advertisement sector in 2012-13 is 11%; a 1% points increase over last year across levels
12% 10% 8% 6%
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
4%
2% 0% JM MM SM TM
2011-12
2012-13
85
Media & Advertisement 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% 100% 80% 60% 40% 20% 0% JM 2.5% MM 15.0%

2011-12
3.0%
5.0%
11.0%
16.0%
20.0%
2012-13
5.0%
7.5%
10.5%
14.0%
21.2%
7.0%
SM
10.0% 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 The variable pay across levels for the sector have shown marginal or no change over last year
30%
20%
15.0% 9.0% 10.0% 15.0% 10.0% 7.0% MM SM TM
10% 3.5% 0% 2.5% JM
2011-12
2012-13
86
Sector Analysis Energy
Energy Sector Snapshot

Participant Profile Revenue wise Breakup
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 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%
40%
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 Performance Highlights
33%
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%
40% 30% 20% 10% 0% JM MM SM TM 16% 14% 14.0% 14.0% 12.8% 10.7% 12.5% 12.5% 12.5% 10.5% 12.5% 12.5% 12.5% 10.5% 20% 18%
2011-12 2012-13
8.5% 8.5%
12.3% 12.4%
13.4% 13.8%
13.8% 14.0%
14.8% 15.0%
The median increments in this sector are at 13.8% The increments follow a general trend line of being higher for Junior management and progressively becoming lower till Top Management 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
12% 10%
8%
6% 4% 2% 0% JM MM SM
TM
2011-12
2012-13
89
Energy Variable Pay

Variable Pay has been conservative; has increased for Junior Management and reduced for Top Management
120%

100%
80%
60% 40% 20% 12.3% 0% JM MM SM TM 14.8% 17.3%
2011-12 2012-13
7% 8.7%
11% 10.8%
12.5% 13.3%
15% 15.9%
18% 18.4%
13.3%

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 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
10% 10.5% 7.6% 0% JM MM SM TM 30% 22.5% 20% 14.8% 17.3% 15.0%
12.3%
13.3%
2011-12
2012-13
90
Contents
Survey Details
Survey Highlights
Participant List
91
PARTICIPANTS LIST
Serial No.
1 2
Company
AAPC India Hotel Management Pvt.Ltd. Accenture Services Pvt. Ltd.
Serial No.
15 16 17
Company
Axis Bank B. Braun Medical India Pvt. Ltd. Bangalore International Airport Limited
3
4 5 6 7 8 9 10 11
Acnielsen Org-Marg Pvt.Ltd.

Aditi Technologies Aditya Birla Finance Ltd. Aditya Birla Retail Ltd. Agfa India Pvt. Ltd. Air Liquide Engineering India Pvt. Ltd. Alere Medical Pvt.Ltd. Aliens Group Anand Rathi Group
18
19 20 21 22 23 24 25 26
BASF India Limited

Bharti Walmart Private Limited Binani Group Biocon Ltd. Bosch Limited Brics Securities Limited Cambridge Solutions Ltd. Castrol India Ltd. Clariant Chemicals (India) Limited
12
13 14
Arvind Brands Limited

Ashiana Housing Atlas Copco (India) Ltd.
27
28
Continental Engines Limited

Cosmo Films Ltd.
Note: Six company names have not been disclosed based on client request
92
PARTICIPANTS LIST
Serial No.
29 30
Company
CRI Pumps Private Ltd. Crimson Logic India Pvt. Ltd.
Serial No.
43 44 45
Company
Fullerton India Credit Company Limited Future Generali India Life Insurance Co. Ltd. Geojit BNP Paribas Financial Services Limited
31
32 33 34 35 36 37 38 39
DDB Mudra Group

Deloitte Consulting India Pvt. Ltd. Deutsche Bank (India) DLF Pramerica Life Insurance Company Limited Dr. Reddy's Laboratories (Pvt) Limited. Emami Limited Experian Credit Information Company of India Private Limited Fidelity Business Services India Private Limited Financial Information Network & Operations Ltd.
46
47 48 49 50 51 52 53 54
GMR Group
Godrej & Boyce Manufacturing Company Limited Grail Research Grand Hyatt Gujarat Heavy Chemicals Limited Gupta Energy Private Ltd. Gupta Global Resources Ltd. Gupta Infrastructure India Pvt. Ltd. GVK Power & Infrastructure Limited
40
41 42
Firstsource Solutions Limited

Fortune Financial Services(Ind) Ltd. Fresh & Honest Caf Ltd.
55
56
HDB Financial Services Ltd

HDFC Bank Ltd.
93
PARTICIPANTS LIST
Serial No.
57 58
Company
HDFC Standard Life Insurance Company Limited Huntsman International (India) Private Ltd.
Serial No.
71 72 73
Company
L&T General Insurance Co. Ltd. Leo Burnett Lloyd's Register Asia
59
60 61 62 63 64 65 66 67
iGATE Patni
IL&FS Investment Managers Limited Indraprastha Gas Limited IndusInd Bank Limited ING Vysya Bank Ltd. Ingenero Technologies (India) Pvt. Ltd. International Asset Reconstruction Company Private Limited International Speciality Products (india) Pvt. Ltd. Kansai Nerolac paints Ltd.
74
75 76 77 78 79 80 81 82
Lodha Group
Lonza India Pvt. Ltd. LOREAL India Pvt. Ltd. LT Foods Ltd. Lupin Ltd. Magma Fincorp Limited Mahindra & Mahindra Financial Services Limited Mahindra Holidays & Resorts India Ltd. Marathon Realty Pvt. Ltd.
68
69 70
Kodak India Pvt. Ltd.

Kongsberg Maritime India Private Limited L&T Finance Limited
83
84
Marks and Spencer (India)

Mecklai Financial Services Ltd.
94
PARTICIPANTS LIST
Serial No.
85 86
Company
Mercator Ltd. Merck Limited
Serial No.
99 100 101
Company
Polyplex Corporation Ltd. Promed Exports Pvt. Ltd. Quatrro Global Services Pvt. Ltd.
87
88 89 90 91 92 93 94 95
Metro Shoes Ltd.

Micro Turners I Mizuho Corporate Bank Ltd. Moser Baer India Ltd. MSPL Limited Mumbai International Airport Pvt. Ltd. Nashik Vintners Pvt. Ltd. NIIT Technologies Ltd. Orchid Chemicals & Pharmaceuticals Ltd.
102
103 104 105 106 107 108 109 110
Rane Group
Royal Bank of Scotland S M Creative Electronics Ltd. Samsonite South Asia Pvt. Ltd. Shapoorji Pallonji Group Sharekhan SKF India Limited SMC Investments and Advisors Limited Star India Private Limited
96
97 98
Pearson Education (India)

Pfizer India Ltd. Pitti Laminations
111
112
Stock Holding Corporation of India Ltd

Super Religare Laboratories Limited
95
PARTICIPANTS LIST
Serial No.
113 114
Company
Sweta Estates Pvt. Ltd. Syntel Limited
Serial No.
127 128 129
Company
Theorem Clinical Research ThoughtWorks Technologies (India) Pvt Ltd. V.I.P. Industries Limited
115
116 117 118 119 120 121 122 123
Synthite Industries Ltd.

Tahiliani Designs Pvt. Ltd. Talisma Corporation Pvt. Ltd. Tata Capital Ltd. Tata Chemicals Ltd. Tata Consultancy Services Tata Housing Development Company Ltd. Tata Power Company Tata Services
130
131 132 133 134 135 136
Vestas Wind Technology India Private Limited

Voltas Limited Welpsun India Ltd. Willis Processing Services (India) Pvt. Ltd. Wipro Technologies XLHealth Corporation India Private Limited Zenta India Private Limited
124
125 126
TCS E-Serve Limited

The Great Eastern Shipping Company Limited The Himalaya Drug Company
96
Key Contacts
P Thiruvengadam
National Practice Leader Human Capital Advisory Services Direct: +91 80 6627 6108
Pooja Karopady
Senior Consultant Human Capital Advisory Services Board: + 91 22 6619 8600, Mobile: +91 98196 18761 Email pkaropady@deloitte.com
Email pthiruvengadam@deloitte.com
Dr. Vishalli S Dongrie

Senior Director Human Capital Advisory Services Direct: +91 22 6619 8832, Mobile: +91 98339 73458 Email vdongrie@deloitte.com
Roy Lobo
Senior Consultant Human Capital Advisory Services Direct: + 91 22 6619 8656, Mobile: +91 99209 14729 Email roylobo@deloitte.com
Indrani Haldar
Consultant Human Capital Advisory Services Board: + 91 22 6619 8600, Mobile: +91 96191 57525 Email ihaldar@deloitte.com
Priyanka Taranekar
Manager Human Capital Advisory Services Direct: + 91 22 6619 8813, Mobile: +91 98673 05893 Email ptaranekar@deloitte.com
Gaurav Warudi
Consultant Human Capital Advisory Services
Mumal Singh
Consultant Human Capital Advisory Services Board: + 91 22 6619 8600, Mobile: +91 99302 19183 Email mumalsingh@deloitte.com
Board: + 91 22 6619 8600, Mobile: +91 98605 84841

Email gwarudi@deloitte.com
97
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. 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.

Survey On Compensation Trends

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Survey On Compensation Trends

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Compensation Trends Survey 2012 Deloitte Human Capital Advisory Services

Overall Industry Analysis

Detailed Sectoral Analysis

2012 Deloitte Touche Tohmatsu India Private Limited

Survey Details Scope of the Survey

Elements detailed in the Compensation Trends Survey 2012 - 13

2012 Deloitte Touche Tohmatsu India Private Limited

Survey Details Survey Methodology

2012 13 Compensation Trends Survey Report

2012 Deloitte Touche Tohmatsu India Private Limited

Survey Details Participant Profile

7.4% 8.5% 10.6% 4.4%

Consumer Business & Retail

Information Technology Enabled Services Infrastructure & Real Estate Manufacturing

Media & Advertising

Pharmaceuticals, HealthCare & LifeSciences Other(s)

2012 Deloitte Touche Tohmatsu India Private Limited

Survey Details Participant Profile

12.2% 24.2% 13.4% 40.2% 48.4% 9.9%

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

Survey Highlights Executive Summary

2012 Deloitte Touche Tohmatsu India Private Limited

Overall Industry Analysis

Detailed Sectoral Analysis

2012 Deloitte Touche Tohmatsu India Private Limited

Overall Industry Analysis Market Overview

Source: ** Economic Survey 2011 2012 Deloitte Budget Publication

2012 Deloitte Touche Tohmatsu India Private Limited

Overall Industry Analysis Annual Increment Trends

Information Technology Enabled Services

Infrastructure & Pharmaceuticals, Real Estate HealthCare & LifeSciences

Consumer Business & Retail

Energy & Resources

Media & Advertising

2012 Deloitte Touche Tohmatsu India Private Limited

Overall Industry Analysis Annual Increment 2012-13

Level-wise frequency distribution

Top Max; Bar Median; Bottom - Min

2012 Deloitte Touche Tohmatsu India Private Limited

Overall Industry Analysis Annual Increment Trends

10th Percentile 2011-12 2012-13 10.0% 9.0%

25th Percentile 11.0% 10.0%

Median 13.0% 12.0%

75th Percentile 15.0% 14.1%

90th Percentile 17.0% 15.1%

Median Increment Across Levels

2012 Deloitte Touche Tohmatsu India Private Limited

Overall Industry Analysis Annual Variable Pay Trends

2012 Deloitte Touche Tohmatsu India Private Limited

Overall Industry Analysis Variable Pay 2012-13

Variable Pay (as % of CTC) Range

Level-wise frequency distribution

Top Max; Bar Median; Bottom - Min

10% 0% < 10 10 - 20 20 - 30 30 - 50 50 - 80 > 80

Range of Variable Pay

Overall Industry Analysis Variable Pay Trends