Indians are expected to get an increase of nearly 10 per cent in their salaries this year. This will be the highest among BRIC nations as well as developed economies.
But don't rub your hands in glee and start splurging away yet. India's projected salary growth of 9.9 per cent this year is a median salary growth percentage across corporate India, and will vary across sectors.
Industries with the highest pay hikes will be e-commerce, venture capital, tech/IT & IT services as well as pharma and biotech (life sciences). So while e-commerce and tech sectors will see remuneration increasing anywhere between 12.4 to 11 per cent, the figures could be as low as just above 7 per cent for the pandemic-battered restaurants sector.
The salary trends are the result of India's largest study on HR trends, including not just salary, but performance, attrition trends and rewards. The findings, released on Wednesday afternoon, are included in the 26th edition of the study done by Aon (previously Hewitt).
Roopank Chaudhary, partner in Aon’s Human Capital Solutions in India, said, “We believe that the fundamentals of the Indian economy remain strong and that there is a positive business sentiment. Even sectors that struggled during the first wave of the pandemic, such as retail, logistics and quick-service restaurants, have bounced back by focusing on digital channels, which is reflected in salary increases of 8 per cent and above (even in those sectors).”
According to Aon officials, the salary increase this year rides on roughly three factors—the optimistic outlook by businesses (the highest now compared with previous years at 88 per cent); the high attrition rate witnessed since the pandemic, forcing companies to shell out money to retain performers, and the correction after muted increases in the last two years due to the pandemic.
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While the news does sound good for employees after the uncertainty of the past couple of years with pay and job cuts rampant, employers now will have to double up. Nitin Sethi, partner and CEO of Aon’s Human Capital Solutions in India, explains why. “This could emerge as a double-edged sword when you combine the rising cost of talent with record-high attrition numbers,” Sethi said. And not spending is not an option, as pandemic-fuelled changes demand that “Organisations need to invest in new-age capabilities to build a resilient workforce,” according to Sethi.
The dicey rise in inflation, oil prices and, not to forget, the still-prevalent Covid-19 situation could still turn out to be party poopers, though.