NEW DELHI: Salaries in India are projected grow by an average 10.3% this calendar year despite the economic volatility, a tad lower than the actual increase of 10.6% last year, according to according to leading global professional services firm Aon plc’s 28th “annual salary increase survey in India.”
The study covered 1,400 companies from over 40 industries and showed a hike ranging from a high of 12.2% for e-com sector employees to 9.7 in retail and 9.6% in other services.
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Although slightly lower than last year, the projected increase continues to be in the double digits despite concerns about economic volatility, due to attrition rates. “At 21.4%, the attrition rate in India for 2022 remained high — a consequence of an ever-changing talent strategy and the ongoing gap between supply and demand of talent.” Aon said in a statement.
Roopank Chaudhary, partner, human capital solutions, India at Aon, said: “Rising economic uncertainty and concerns over economic volatility are making salary increase planning especially difficult this year. India Inc has awarded aggressive salary increases over the last two years, which has some companies grappling with higher wage bills. Globally connected industries, such as technology platform and products, are somewhat cautious in their salary budgets while industries driven by domestic demand, such as manufacturing or FMCG/FMCD, are bullish on their budget planning as compared to their five-year averages.”
Forward-looking organisations are therefore contextualising salary increase planning with data-driven analysis and the unique circumstances of their own industry and organisation to maintain their workforce resilience and make more-informed decisions, Chaudhary added.
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The survey shows salary increase based on individual performance stays steady at 7.8% while increase on top of merit such as market corrections, special adjustments and promotions is expected to moderate to 2.8%, which is higher than the historical average. At junior levels the non-merit increase projections are 3.3%.
Pritish Gandhi, director and leader of the executive compensation and governance practice in India at Aon, said: “The non-merit salary increase projections continue to be moving up as firms budget for retaining talent through promotions and off-cycle corrections. As companies look to differentiate and optimise their talent spend, employers are investing more for critical talent in key roles. While it is important for businesses to define and adapt pay increases for both merit and non-merit factors, organisations must take a strategic approach to total rewards to build a resilient workforce and shape their strategies towards long-term drivers of pay and performance.”
