India Inc. is likely to offer an average increase of 6.4% in salaries in the 2021 appraisal season with the top performers receiving 20.6% increment, Willis Towers Watson said on Thursday.
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This will be more than the 5.9% average salary increase offered by Indian companies in 2020, the global consulting and advisory firm said in its salary projection survey.
Among sectors, high-tech and consumer product companies are expected to offer the biggest pay hikes while business process outsourcing (BPO) and energy firms will offer the lowest increment, it said.
“High-tech, pharmaceuticals and consumer products and retail project a median salary increase of around 8%, which is more than the general industry projection. The financial services and manufacturing sector projects a 7% increase in 2021, while BPO is at 6%. The energy sector is expected to see the lowest increase of 4.6%,” it said.
According to the survey, while the business environment and sentiment has improved, it may not translate into hiring more people.
“Of the surveyed companies in India, 37% have projected a positive business revenue outlook for the next 12-months, up from 18% in Q3 2020. Despite a comparatively optimistic projected business outlook, recruitment is yet to pick up. The study shows that only 10% of the organizations in India plan to add new headcount compared to 14% last quarter,” the report said.
{{/usCountry}}“Of the surveyed companies in India, 37% have projected a positive business revenue outlook for the next 12-months, up from 18% in Q3 2020. Despite a comparatively optimistic projected business outlook, recruitment is yet to pick up. The study shows that only 10% of the organizations in India plan to add new headcount compared to 14% last quarter,” the report said.
{{/usCountry}}“As companies in India respond to the economic implications of the covid-19 crisis, there is an increased optimism on business recovery, but it is yet to translate into the salary increment budget,” said Rajul Mathur, consulting head, talent and rewards, Willis Towers Watson India. “With compensation budgets lower than previous years, companies are likely to prioritize allocation towards protecting critical and high skilled talent. Through 2021, we can continue to expect greater emphasis on pay for performance and pay linked to business output,” Mathur added.
India corporates have been struggling since the covid-19 outbreak, resulting in a massive job crisis over the past year. While there are green shoots of revival in rural India, especially in construction and real estate activity, industrial belts and services sectors have been very slow in creating new jobs during the covid recovery phase, Mint reported on 8 February.
In the Asia-Pacific, companies in Indonesia are projected to offer a 6.5% pay hike, followed by China (6%,) Philippines (5%), Singapore (3.5%) and Hong Kong (3%), the survey said.
For different job roles in India, median salary increase for executives is projected at 7%, down from 7.1% last year, while the middle management, professional and support staff are expected to get 7.3% raises this year. Manual workers are expected to receive a lower salary increase of 7.2% in 2021 compared to 7.7% last year, it said.
“Unprecedented change linked to an increasingly virtual work environment has brought to the fore the role of distributed leadership. Organizations should evolve structures to identify, recognize and reward leaders who have demonstrated the ability to lead change and positively impact engagement and productivity,” said Mathur.