India Inc may offer 6.4% hike on avg, top performers to get 20%

NEW DELHI: 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.

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 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, recruitbiggest ment 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.

“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,

reported on 8 February.

WHILE THE BIZ ENVIRONMENT AND SENTIMENT HAS IMPROVED, IT MAY NOT TRANSLATE INTO HIRING MORE PEOPLE: SURVEY