Companies in ecommerce and logistics are reducing their fixed costs by not hiking salaries and, instead, giving out bigger performance-linked incentives, according to recruitment firms such as Betterplace, Waah Jobs,
A delivery person, who got paid around Rs 8,000-12,000 as base pay, could earlier make Rs 5,000-6,000 as incentives. Now, the potential incentives have gone up to Rs 10,000-12,000, said Olive Sen, head of product and marketing at Waah Jobs and OLX People. Waah Jobs has about 4 lakh vacancies listed on the platform.
Twice as many companies are now offering performance-linked incentives compared with last year, said Sen.
While it was usually food-tech companies such as Swiggy and Zomato that offered these pay structures, traditional companies such as pharmaceutical firms, telecom companies and even some public-sector undertakings are planning to introduce it, he said. This is because of the introduction of the PLI (production-linked incentive) scheme, which the Union Cabinet had approved in November last year to promote local manufacturing.
With the IPL cricket tournament coming up, more people are expected to order in. That’s why food delivery companies are willing to offer 40-50% increase in the joining bonus, said Pravin Agarwala, chief executive of Betterplace, which provides workforce management solutions for companies hiring blue-collar workers. Delivery persons can now make Rs 5,000-10,000 as joining bonus, depending on the location and company. Betterplace on-boards about 1.3 lakh blue-collar workers each month.
About five months ago, Betterplace started giving out bikes on rent or EMI to delivery persons. It has so far given out a few thousand bikes. A popular pizza delivery chain, too, is offering bikes and petrol to delivery persons and paying them on a per-delivery basis.
Mobile phone companies, meanwhile, are increasing incentives for in-store promoters.
“Variables are going to the extent of 30% as compared to 10-15% in pre-Covid days… It’s increasing their earning potential by 20-25%,” said Alok Kumar, senior director of sales, account management and global accounts at ManpowerGroup India.
Why is this model picking up? Companies are paring fixed costs in a bid to become more profitable. Kumar said despite positive indicators pointing to an economic recovery, companies are still sceptical about salary increases.
The performance-linked model reduces risk in the event of an economic downturn. At the same time, workers can make more money when they perform well and when the company makes money.
In the manufacturing sector, wages have moved up 3-6% only because of the revision in minimum wages. However, companies are doling out perks which include joining bonuses, free meals, and even rent for a few months of stay in sanitised paying guest accommodation for workers who move to industrial townships.
In-demand skilled workmen such as fitters, bar benders and masons are being offered a 3-5% increase in wages, along with the cost of travel and stay, said Sudeep Sen, business head for industrial manufacturing and engineering at TeamLease Services. In the Sriperumbudur Industrial Area in Tamil Nadu, for instance, companies are offering “rehabilitation contribution (pay hike) and also attendance bonus and performance linked incentives”.