If you are an employee in corporate India, your salaries are likely to rise by 10% on an average this year, especially if you are in the pharmaceuticals, chemicals, consumer goods and engineering services sectors.
Thanks to improving business confidence, positive expectations from the upcoming Lok Sabha elections and moderating inflation, the annual salary survey of 565 companies conducted by consulting firm AON Hewitt for India projected a 10% hike for the current year. However, Anandorup Ghose, practice leader at the human resource solutions provider said that even as companies opined that 2014 will be better, they are expected to adopt a cautious approach and not increase their fixed costs.
The projected hike is a tad lower than the average 10.2% increase given in 2013. Also, with retail inflation close to double-digit levels for most of the past year, a hike may only just keep up with purchasing power.
“There is optimism among business leaders but companies surveyed said they wanted to be cautious as there is still uncertainty in the economic climate,” Ghose added.
The average salary hike was 6.6% in 2006. There has been a sort of “plateauing” in salary increases between 2012 and 2014 compared to the high double-digit increases in the last decade, the report said.
Sectors including retail, financial services and hospitality projected a lower range of salary increases, with their businesses getting more impacted by the economic slowdown.