Employee is ok to reduce other components of his salary but wants to show a high basic. What is the impact on the company?

A new recruit is asking to show a higher basic salary. He is okay to reduce other components of his salary but wants to show a high basic. What is the impact on the company? How is this advantageous to him.

A new recruit is requesting an increase in their basic salary while being open to a reduction in other salary components. They prioritize having a higher basic salary. What implications does this have for the company, and how does this benefit the recruit?

In a wage structure comprising of different components according to the nature of the job, type of industry, place of work, possible automatic devaluation of the real income due to continual inflationary trends in the economy, etc., basic pay becomes a determinant of the allowances as well as actuarial contributions to various social security schemes, which are termed as indirect financial commitments to the employer. That's how the concept of CTC emerged as an important factor in wage/salary negotiations. This is the generally prevailing scenario.

However, nowadays, for obvious reasons like non-unionization of knowledge workers, though large in numbers, an increase in the employability of certain highly skilled employees due to competitive hiring methods like poaching, market-driven production schedules, etc., wage/salary negotiation has become highly individualized and employee-specific. Hence, the trend like the one mentioned in the post.

In such a situation, the demand of the new recruit has to be considered with reference to the additional indirect commitments arising out of a higher basic pay. If the expected employee contribution of value addition is more, of course, one can consider the demand positively as it would lead to a mutually beneficial situation for both parties.