The slowdown-hit Indian corporate sector will reduce annual salary hikes by about five per cent, a survey by human resource consultants Hewitt Associates released on Thursday said.
Companies are looking at an average 8.82 per cent hike in salaries as compared to 13.3 per cent last year, the survey of 480 companies across India said.
"Countries worldwide are experiencing the burden of slow economic growth. However, with a 7 per cent-plus growth rate, India still has one of the highest salary hike structures in the world along with China," Sandeep Chaudhary, head of the performance and rewards consulting division at Hewitt India, told reporters.
On a cautious note, he, however, added that the 8.82 per cent figure was reached at in December and January - when the survey was conducted - when many companies were in the process of revising their respective appraisal structures, due to which a further 1-1.5 per cent hike in the structure was possible.
While the average salary hike has come down, Chaudhary said a few organisations are also reviewing salary cuts, especially that of the top management.
"Many organisations are looking at further revising their pay increase structure, while some may even postpone the appraisal date by a few months," he said.
Among the sectoral pay hikes, the pharamaceutical sector was projected to get the highest increase of 13 per cent, while IT and retail would see the lowest hikes: 6.7 percent and 5.3 percent, respectively.
Realty and infrastructure firms were kept out of the scope of the survey completely, Chaudhary said, explaining that the "dismal performance" of these sectors would have kept the pay hike projections to nil or even negative.
The survey gave a rather positive outlook on the job market, saying over 63 per cent of the companies were still open for fresh hiring and with only 16 per cent considering downsizing.
"Only 37 per cent of the companies have frozen fresh recruitments. However, mass hiring is something which the job markets won't see for some time to come," he said.
According to him, the average retrenchment rate stands at over 51 per cent in the US and about 31 per cent in China.