New Delhi: Despite economic volatility, Indian companies are expected to increase the salaries of their employees by more than 10 per cent in the current year as the attrition rate in the country remains high. This will be the second back-to-back double-digit salary hike in the country as the average salary hike by Indian companies was 10.6 percent last year, showed a survey.
According to a survey conducted by professional services firm Aon Hewitt Global, the average salary hike in India is expected to be 10.3 per cent in the current year while the average salary hike in the country in the last year was a little higher at 10.6 per cent.
In its 28th Annual Salary Increase Survey in India, which has been released on Thursday, Aon Hewitt said the survey analyzed data from across 1,400 companies from more than 40 industries, which is the largest and most comprehensive salary survey in the country. “The projected increase continues to be in the double digits despite concerns about economic volatility, which may be in response to attrition rates,” said the survey.
In a statement, the firm said, at 21.4 per cent, 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. 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."
Chaudhary said 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,” Chaudhary said in the survey.
The survey said forward-looking organizations are contextualizing salary increase planning with data-driven analysis and the unique circumstances of their own industry and organization to maintain their workforce resilience and make more-informed decisions.
Sector-wise expected salary hike in India in 2023
While the overall salary hike in the country is expected to be 10.3 per cent in 2023, e-Commerce firms are expected to offer the maximum salary increase at 12.2 per cent, followed by professional services are expected to offer a salary hike of 11.2 percent. These two sectors will be followed by technology platforms and products that will offer a salary hike of 10.9 percent, followed by Global Capability Centers which is expected to hike employee salary by 10.8 percent.
In terms of expected salary hike this year, these two industries will be followed by Technology Consulting and Services companies that are likely to offer a salary hike of 10.7 per cent, followed by Financial Institutions Fast Moving Consumer Goods (FMCG) and Fast Moving Consumer Durables (FMCD), as all three sectors are expected to offer a salary hike of 10.1 percent.
However, according to the survey, the expected salary hike in other sectors of the economy such as manufacturing, life sciences and retail sector will be in the single digit. The manufacturing sector is expected to offer a salary hike of 9.9 percent, followed by Life Sciences at 9.7 percent, Retail 9.7 percent and other services at 9.6 percent.
