India Inc tops in pay hike

Average salary increased 13.7% in 2004.

India's was the highest average salary increase ""13.7 per cent in 2004 "" in the Asia-Pacific region, and the party is expected to continue in 2005 with a hike of 14.2 per cent, according to Hewitt Associates' 9th annual salary increase survey.

Salary increments in 2004 in India were much higher than the 8.1 per cent reported in the Philippines, 7.6 per cent in China and 7.5 per cent in Thailand. But much of the hikes in India could have happened because of a rise in inflation during the year.

"Due to a large regionwide economic upswing, higher inflation and attrition rates, companies reported a more positive outlook on salary increases across industries in 2004," Nishchae Suri, business consulting leader, Hewitt Associates Asia-Pacific, said.

The survey says companies are not likely to have a salary freeze across the region as the outlook for the performance of companies has been projected to be much more robust.

In 2005, the entertainment, communications and publishing sectors are expected to see the highest salary growth with an increase of 15.4 per cent, the survey says. Sectors like information technology and investment banking could see a growth of 15 and 14.5 per cent, respectively.

Asset management companies may also make it to the list of top five firms with an investment increase of 13.8 per cent. In 2005, non-profit organisations will see a salary hike of 9.2 per cent while the chemical and FMCG sectors are expected to see a hike of 11 and 11.2 per cent, respectively, this year.

Salaries of Indian employees increased by 9.7 per cent to 14.3 per cent across the board between July 2004 and January 2005. Sectors like IT, entertainment, publishing and information technology enabled services (ITeS) have witnessed growth of 14.9 per cent, 14.7 per cent and 14.5 per cent, respectively.

Pay packets for professionals, supervisors and technical employees saw the highest increase of 14.3 per cent in 2004. Managers got an increase of 13.3 per cent while senior management staff got a hike of 12.2 per cent. Professionals are expected to see a hike of 14.8 per cent this year.

The survey, which covered 573 organisations and 700,000 employees, reports that the lowest salary increases in 2004 were seen in non-profit organisations at 9.1 per cent, banks at 9.3 per cent and chemical/petrochemical companies at 9.5 per cent.

The rate of attrition in India, Suri said, had risen from 13.2 per cent in 2003 to 14.5 per cent in 2004. Professionals and supervisors/technical cadre recorded the highest level of attrition at 14.6 per cent last year, Suri said.