Companies plan retention bonuses for employees
By siliconindia   |   Wednesday, 04 November 2009, 23:04 IST   |    3 Comments
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Companies plan retention bonuses for employees
New Delhi: Since the habit of hiring is making a return, companies across the spectrum such as chemicals business player SRF, auto ancillaries major Sona Koyo Steering, engineering firm Samsung Engineering, IT firm Perot Systems, Adobe, Nitco Tiles and a Mumbai-based finance company, have planned surprise packages for their employees including retention bonuses to check attrition. Retention bonuses are aimed to retain the employees, whom a company thinks are critical for its continual growth. It is an incentive paid to an employee to retain them through a critical business cycle to ensure productivity. As reported by the Economic Times, SRF, which is introducing the concept for the first time, will pay out 30-40 percent of the salary as retention bonus to 5-10 percent top and middle-level employees. "We didn't hike salaries last year. Things are changing now and we need to prepare ahead of time to prevent loss of any crucial resource," said Suresh Dutt Tripathi, President, Group HR, SRF. Adobe India CEO Naresh Gupta, said, "Last year was different and only a few people got hikes. No bonuses were doled out." Adobe plans to re-introduce the bonus and award top 30 percent of its 1,500 employees across levels and functions with a mix of stock options and cash by January-February next year. Perot Systems has given each of its 100 new recruits in the past six months at the mid to junior levels, a retention bonus of 15-25 percent. Samsung Engineering worries about losing people that it has groomed in the past two years and it has given a retention bonus in the range of 8-15 percent in March this year. Also, companies including TCS, SBI, Wipro, HDFC Bank and Larsen and Toubro have recruited about 1,30,000 people despite the slowdown last year. The return of recovery has ushered in an intense talent hunt that is likely to leave many companies prone to poaching. Also, a Hewitt Associates study released last week showed the highest voluntary attrition rate of 13.8 percent in financial year 2010 in Asia Pacific amid the slump. On the other hand, a survey conducted by Manpower has predicted a net addition of 25 percent employees to the existing employee pool of Indian firms, that's the most optimistic outlook among 35 countries across the globe. All this points to increasing hiring activity in the coming months.

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