NEW DELHI: Employees in India can expect a higher salary hike this year compared to 2021, as businesses shift focus beyond the pandemic towards a growth agenda.
At 9.99%, India is projecting the highest salary increase among BRIC nations (Brazil at 5%, Russia at 6.1% and China at 6%) and developed economies despite a tough few months with the second and third waves of infections. In 2021, the average salary increment was 9.3%.
Participants in the AON Salary Increase survey, however, reported the highest attrition figure – 21%—in over a decade in 2021.
“Salary increases should come as a welcome break for employees amidst a volatile period. For employers, it could emerge as a double-edged sword when you combine the rising cost of talent with record-high attrition numbers,” said Nitin Sethi, partner and CEO of Aon’s Human Capital Solutions in India.
The industries with the highest projected salary increases are e-commerce and venture capital, hi-tech/IT and IT enabled services (ITeS) and life sciences.
“This trend is fueled by economic recovery and the need for organizations to invest in new age capabilities to build a resilient workforce,” said Sethi.
The sectors with the lowest projected hikes are mining/metals, restaurants/QSRs and cement, showed the survey that analyzed data across 1,500 companies from more than 40 industries.
Around 88% businesses, however, foresee an improvement in business outlook in 2022, which is 11% higher than 2021.
In addition, 33% organization’s are expected to give a double-digit salary increase this year, an increase of 5 percentage points over 2021.
“We believe that the fundamentals of the Indian economy remain strong and that there is a positive business sentiment,” said Roopank Chaudhary, partner in Aon’s Human Capital Solutions in India.
“Even sectors that struggled during the first wave of the pandemic, such as retail, logistics and quick-service restaurants, have bounced back by focusing on modern trade/digital channels, which is reflected in salary increases of 8% and above. However, we do see some potential headwinds due to anticipated high inflationary pressures and the still-prevalent Covid-19 threat.”
