India Inc projected to pay 9.4% salary hike in 2022, a four-year high
NEW DELHI : India Inc. is projected to pay an average 9.4% salary hike in 2022, a four-year high as companies turn positive about economic recovery, build resilience and a talent war picks up effecting a high attrition rate of 20%.
According to AON annual salary survey the 2022 projection of an average 9.4% salary increase is a sign of strong economic recovery and improved consumer sentiment also underlines a brewing talent war.
The 9.4% average pay hike is highest in six years except 2018 when the average increment was 9.5%. To be sure, the 2021 average pay hike of 8.8% pay hike was higher than the expected pay hike of 7.7% as the economy opened up, and the companies became resilient to deal with the second wave and manage their growth.
The study that analyzed data from 1,300 companies in 39 industries said the 2022 salary hike projection is a sign of strong economic recovery and improved consumer sentiment. According to the survey, IT will be a lead pay master with an average hike of 11.2%, followed by professional services and e-commerce firms which are projected to pay 10.6% increment to their employees.
Even the 2021 laggards like real estate is expected to pay 8.8% hike, as against 6.2% in 2021. Similarly, restaurant sector which was battered by the pandemic in past 18 months is slated to pay 7.9% hike in 2022.
High double-digit attrition is the strongest we have seen in more than a decade. The war for talent is back in India, which we anticipate will keep salary increases high, said Nitin Sethi, partner and CEO of Aon’s performance and rewards businesses in India
“While 2021 is a year where certain sectors remain under stress due to the COVID-19 pandemic, most businesses have an optimistic view going into 2022 and are projecting higher salary increases. We see positive sentiment across most sectors, high investor confidence with sustained foreign direct investment flowing into the country and growing consumer demand across most segments," added Sethi.
Roopank Chaudhary, partner in Aon’s human capital business, said, “Despite another wave of Covid-19 hitting the nation hard, Indian organizations have displayed resilience in riding through the tough times. While pandemic risk in India continues, the business sentiment and salary projections for 2022 tell us that employers are building for growth and are much better prepared than in 2020."