Economy bites: salary revisions likely to be hit by slowdown, politics
With just a couple of months to go for annual raises to be tied up, HR officials of companies currently working on wage plans said a majority would get single-digit percentage hikes this year as the economy is showing no signs of an anticipated recovery. Will April be a cruel month?business Updated: Jan 15, 2014 09:02 IST
If you are an average employee of Corporate India, expect a modest single-digit salary increase this year.
With just a couple of months to go for annual raises to be tied up, human resource officials of companies currently working on wage plans said a majority would get single-digit percentage hikes this year as the economy is showing no signs of an anticipated recovery. With retail inflation at double-digit levels, that in effect does not mean much.
The uncertain economic mood has been compounded by the emergence of the Aam Aadmi Party (AAP) and the possibility of coming to power at the centre. AAP is seen by its critics as taking up policies that may raise subsidies or curtail FDI, thereby hurting growth.
Just a few months ago, most HR consultants including the US-based Towers Watson had predicted that employees in India were expected to get an average 11% hike in their salaries in 2014.
With the economy expected to clock 5% growth this year and the job growth shrinking, firms are less worried about losing talent.
Companies have been shying away from making any fresh investments.
And so, unless you have won exceptional accolades for your performance in the current financial year, you may have to settle for a raise of about 7- 8%.
However, if you happen to be engaged in the IT sector, you could be a tad luckier than your peers in other sectors. Sectors such as telecoms, real estate and construction could see minimal hikes, say HR consultants. Even in private banks, hikes may not be handsome this year like the previous year, though competition is expected to become intense with several new banks expected to start up. The scrutiny will be tighter in under-performing sectors like telecom, power, energy and infrastructure.
“Considering the current economic and political scenario, there will be a very marginal hike in the salaries this appraisal season,” said Hitesh Oberoi, managing director, Info Edge, which runs job portal Naukri.com
“There could be instances where employees get no hike at all and there could be very substantial hikes for those who have contributed to boost the balance sheets,” said Aditya Narayan Mishra, president at staffing firm Randstad India.