Average pay rise for Indian employees this year will be 9.5%, suggests survey of 1,000 companies
The Aon Hewitt study said this is lower than the previous year because of political and economic changes including Brexit, the US elections and demonetisation.
A study of salary data from 1,000 Indian companies has projected a 9.5% average increase in pay rises for employees across industries in 2017. The study, released on Wednesday, said this is a marginal decrease from 2016. The Aon Hewitt Salary Increase Survey in India said that while a majority of the industries it surveyed projected a below-10% increase in pay hikes, “business sentiment remains positive and optimistic”.
Consumer internet companies will have a 12.4% hike in salaries, the biggest increase in 2017, according to the survey. Some other industries with high projected pay hikes include the life sciences sector (11.3%), the professional services sector (10.9%), the chemicals sector (10.3%) and the entertainment media sector (10.3%). Sectors with the lowest projected salary increases included financial institutions (8.1%), transportation, logistics and shipping services (8.0%) and cement (7.6%).
The drop was a reaction to political and economic changes, including Brexit, Donald Trump’s win in the United States presidential elections, and the demonetisation of nearly 86% of India’s liquidity. “While traditionally pay increases in India have not been affected by inflation rates, the significant drop in Consumer Price Index (CPI) over the last few quarters has also been a good opportunity for companies to manage their compensation budgets,” the survey said.
However, the study says that the segment of the Indian population categorised as “high performers” has fallen to 7.5%, the “lowest number recorded in the 21 years of the Salary Increase Survey in India. Separately, the attrition rate in the country for 2016 stood at 16.4%, similar to 2015 levels, Aon Hewitt said. “While inequity of pay remains a concern, the key reasons cited by employees for voluntary attrition are role stagnation and limited growth opportunities.”