India Inc’s average salary hike to be 9.4% in 2018: Aon
Employees in India are likely to get an average salary hike of 9.4% in 2018 while top performers are likely to get a salary increase of 15.4% according to Aon India’s Salary Increase Survey. The HR consultancy firm released the 22nd edition of its annual Salary Increase Survey in India last week,that analysed data across more than 1,000 companies from over 20 industries.
As per the survey, companies in India gave an average pay increase of 9.3% during 2017 marking a departure from the double digit increments given by organizations since the inception of this study.
The projections for 2018 are also expected to be similar at 9.4% highlighting increasing prudence and maturity being displayed by companies while finalising pay budgets.
The focus on performance is getting sharper year-on-year. A top performer is getting an average salary increase of 15.4%, approximately 1.9 times the pay increase for an average performer. Moreover, the bell curve is sharpening with a significant drop in the percentage of people in the highest rating.
According to Anandorup Ghose, Partner at Aon India Con- sulting:“despite an improvement in macro-economic forecasts - salary increases remain at the same level as was projected in the last fiscal. With increasing maturity, HR budgets are being realigned towards top performers as opposed to the broader population.”
Sectors such as Professional Services, Consumer Internet Companies, Life Sciences, Automotive and Consumer Products continue to project a double digit salary increase for 2018. Consumer Internet Companies however, over the past 3 years have seen a significant drop of 250 basis points, from 12.9% to 10.4% projected for 2018. Interestingly, the Hi Tech/ Information Technology sector, which has gone through a spate of upheavals in recent times, is projecting an average hike of 9.5% in 2018, whereas the third party IT services which provide majority of the employment in India are projecting an average hike of 6.2%.
Over the years, with increasing pressure on compensation budgets, there is an emerging focus on rationalization of budgets. Companies are increasingly taking into account the base effect e.g., pay increases for top and senior management is consistently going down.
Ghose added: “Pay increases are becoming more nuanced. We are increasingly seeing a multitude of factors impacting salary increases such as size of the company, business dynamics within the sub industry, nature of talent requirements and quite obviously, performance.”
The attrition rate in India is seeing a continuous downward trend as the overall attrition has come down from an average of 20% in the previous decade to 15.9% in 2017.