Low salary hikes are here to stay. For, corporate India is expected to dole out an average salary hike of only 10.3% this year, the lowest in the decade, according to an annual report released by AON Hewitt, a global HR consulting firm.
Last year, companies gave out an average hike of around 11% amid challenging economic times and slowing growth.
“In sync with the economic outlook, especially of 5% growth, an increase of 10.3% is among the lowest the country has seen in a decade, barring the subprime crisis year,” said Sandeep Chaudhary, partner - talent and rewards – at Aon Hewitt India.
Chaudhary, however, added: “The estimates are conservative as this might be further revised downwards and may touch 9-9.5% when the actual figure comes out.”
Sectors such as financial services, outsourcing, IT and telecom have seen wage hikes fall over the past couple of years. This year too, companies servicing these sectors are expected to remain cautious.
But the mainstay sectors, such as automotive, manufacturing and consumer goods, which so far have been resilient, have also reported conservative wage hike projections.
“Though business sentiment is strengthening on account of inflation reaching a three-year low and stock markets rising, the cautious streak is evident in the projected salary increase numbers,” said the annual report.
Cost-consciousness and performance-orientation are the key themes this year. Organisations are looking at compensation and productivity together, and hence, closely evaluating return on compensation.
“Globally, Venezuela topped the chart with 25.6% rise and Argentina is at the second position with 24.2%, followed by Vietnam and Tanzania at 12.6% and 10.6%, respectively,” the survey, which covered 500 organisations, said.