Solace from inflation: Companies hike salaries
With day-to-day living turning costlier, companies have raised salaries to as high as 40% especially at the junior levels, say experts.business Updated: Mar 21, 2011 13:24 IST
With day-to-day living turning costlier, companies have raised salaries to as high as 40% especially at the junior levels, say experts.
In recent times, inflation has been at high levels due to soaring prices of essential commodities.
"Inflation has affected the salary hikes towards the higher side," executive search firm GlobalHunt's director Sunil Goel told PTI.
"As inflation has raised cost of living, so direct impact is visible more at junior and entry level where companies have increased salaries up to 30-40%," he said.
Last month, inflation climbed to 8.31% as compared to 8.23% in January. Food inflation stood at 9.42% in the week ended March 5.
As such attrition rates along with inflation had prompted companies to enhance the overall basic salary structures to "15-20% at all the employment levels", Gi Staffing Services' Branch Head (Mumbai) Swapnil Jain said.
India is expected to see one of the highest salary hikes this year at 12.9%, according to global HR consultancy Aon Hewitt. Last year, actual increase was around 11.7%.
"Inflation decreases the propensity to save; therefore the organisations try and match up to the salary packages of the employees to the same extent," Elixir Web Solutions' HR Manager Geeta Verma said.
Elixir is a leading recruitment process outsourcing firm.
"The hike in inflation rates has enabled organisations to provide competitive salaries so that ratio of expenses/savings remains proportionate to the increasing levels of inflation," Verma noted.
Aon Hewitt has projected salaries of general/entry level staff to be 12.7% in 2011 as compared to 11.4 % last year. It had pointed out the rise could be attributed to high turnover (attrition) rates and high inflation rates.
However, experts feel that inflation has not pushed salaries to higher levels in companies across the board since some entities also look at pay parity for their employees.