Average salary hike in Indian companies this year may be lower

Admin
Published on: 18 July 2017 10:20 AM GMT
Average salary hike in Indian companies this year may be lower
X
Average salary hike in Indian companies this year may be lower

New Delhi: The average salary hike in private companies in the country this year may be lower than last year. As against 10.3 per cent in the previous year, the increase is expected to be 9.5 per cent in the current year.

This forecast has been made in the latest survey done by a British firm Aon Plc. The report based on discussions with 1000 countries across the nation was released towards end of February last.

The surveyor has held factors like " a difficult economic environment " and slow pace of growth mainly responsible for it. The decrease is marginal and it reflects the maturity that India companies has displayed amidst global and Indian economic events.

“Political changes and economic headwinds have had an impact on business performance. However, the trend this year reflects a gradual slowing of pay increases and higher emphasis on productivity and performance – quite literally a ‘greying’ of salary budgets for India,” a company release said.

According to the survey, sectors such as life sciences, professional services, chemicals, entertainment media, automotive and consumer products continue to project a double-digit salary increase during the current year.

While traditionally pay increases in India have not been affected by inflation rates, the significant drop in consumer price index (CPI) over the last few quarters has also been a good opportunity for companies to manage their compensation budgets.

The research shows that the segment of population that features as ‘high performers’ has fallen to 7.5 percent -- the lowest number recorded in the 21 years of the salary increase survey in India. Consequently, the multiplier that India Inc offers to these employees continues to be high. At 1.8 times, India is one of the highest differentiators – the difference between the top and the worst performers -- across Asia.

Last year had shown organisations taking a strong view towards performance differentiation and not only have bell curves become sharper, the pay differentiation between top and average performers has also increased.

The attrition rate in India was similar to 2015 at 16.4 percent. While attrition was contained at a broader level, key talent attrition increased to 12.3 percent in 2016 from 7.3 percent in 2015.

Also read: Twenty fifth of July is not an ordinary date in Presidential history

Admin

Admin

Next Story