Background

We will soon embark on a financial year end and thereby let us look back at what our study of impact on Accumulated Leave Balances, Average Salary & Other Components affected by Covid and thereby impacting the actuarial valuation data for the experiences of companies during the periods March 2020 to March 2021and March 2021 to December 2021.

Any impact of Omicron variant would come through in our 2021-22 study.

This article is a follow on from our study in 2020 at the height of the first wave of COVID-19. This can be found here.

PART A: March 2019-2020 vs March 2020-2021

Our base information is cross industry over a two-year comparative data, namely, FY 2019-20, and FY 2020-21. The data consists of 1,800+ companies covering approximately 1,900,000 employees in each period.

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Employee Movement

1. At an aggregate level, the proportion of new joinees has reduced by about 5% i.e., to 16% in 2021 from 21% in 2020
2. There has been an improvement in the average attrition rate by 3% i.e., to 15% in 2021 from 18% in 2020
3. Changes in employee count is showing that 2020-21 was mostly about replacement hiring
4. 79% of employees continued from April 2019 to March2020 whilst 84% of employees continued from April 2020to March 2021

Salary Movement

1. Proportion of employees receiving no increment has increased significantly in 2021, with nearly 25% got no increment in 2021
2. However, from those getting an increase, the average salary increased 21% as compared to 19% the year before.
3. It is seen that the proportion having salary reductions decreased a little.

Pattern in Accumulation of Leave Days At an aggregate level, the total accumulation of leave days in FY2019-20 and FY2020-21 is almost the same(as indicated in the beginning of the article)

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PART B: March 2021 to December 2021 - Updates

We have briefly analysed similar information for a more recent period. Given the need to look at common companies and continuing employees, this period includes data from 330 companies

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Looking forward to next year and beyond

The medium to long term impact of COVID-19 is still not clear. This will depend very much on individual companies’ circumstances and their responses to emerging from the pandemic. Early signs seem to suggest things are on the way back to some normalcy.

Having a technically thorough analysis of the potential possible implications that might occur, will help companies to understand their financials better and help in decision making while engaging in discussions with auditors.

If you have any queries about this article or would like to discuss about any employee benefits related matter, such as actuarial valuations and related advice for Pension Scheme, Gratuity and Leave schemes, or ESOP’s please get in touch with us.

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Disclaimer

➢ The data used is the final actuarial valuation data, on which formal actuarial valuation reports we reissued.

➢ It has been assumed that validation checks were already performed on the respective data.

➢ The data has been considered at an aggregate level. Hence, the experiences at an individual level might differ.

➢ The analysis has been conducted using unique identification code for individual employees. No personal identifiable data has been used during the process.