Salaries in India to grow 9.4 pc on average in 2018, finds Aon Hewitt's annual survey
This is the second year in a row that average pay hikes will be under 10 percent. Organisations are realigning their HR budgets to better reward key performers.
India Inc is estimated to see an average salary hike of 9.4 percent in 2018. This is nearly the same as 2017, when companies doled out an average pay hike of 9.3 percent, revealed HR consultancy Aon Hewitt in its annual Salary Increase Survey. Key performers will be rewarded more with an average hike of 15.4 percent, it said.
Aon Hewitt surveyed over 1,000 companies across 20 countries, and India topped projections in the Asia-Pacific region. Other APAC nations viz. China (6.7 percent), Philippines (5.8 percent), Malaysia (5.1 percent), Singapore (4 percent), Australia (3.2 percent) and Japan (2.5 percent) ranked below India.
This is the second year in a row that average pay hikes will be under 10 percent.
But, the incentive for good performance is sharper than ever before with compensation structures getting more and more “nuanced”. Companies are now “becoming more cautious” in recognising and remunerating their key talent, according to Aon.
Anandorup Ghose, Partner at Aon India Consulting, said: “We are increasingly seeing a multitude of factors impacting salary increases such as the size of the company, business dynamics within the sub-industry, nature of talent requirements and quite obviously, performance… HR budgets are being realigned towards top performers as opposed to the broader population.”
Sectors such as professional services, consumer internet companies, life sciences, automotive and consumer products will be the biggest gainers with double-digit salary hikes projected in 2018.
Professional services firms, which were swarmed with orders in the post-GST regime, will dole out the biggest pay hikes at 10.7 percent. Auto firms are projected to pay their employees 10.4 percent more. Meanwhile, IT/ITeS firms will offer their staff 9.7 percent more.
Sectors with the lowest projected hikes include travel and hospitality (8.9 percent), engineering design (8.8 percent), BFSI (8.6 percent), and transportation and logistics (8.6 percent).
The positive though has been the reduced rate of attrition in Indian companies. Attrition is down to 15.9 percent from 18.5 percent in 2013 and above 20 percent in the last decade.
India, meanwhile, witnesses the highest inflation-adjusted salary increase in the world. But, not all countries account for inflation.
Chris Kelly, Directors - Survey Product Management, Aon Hewitt, said: “Salary increases for many workers around the world for the past several years have not kept up with inflation. In 2018, the amount of wage growth that companies have projected should result in increased purchasing power for employees in 80 percent of the countries where we are reporting data.”