Salary rise of Indian employees would be among the highest in the world in 2011. According to a survey by global HR consultancy group Aon Hewitt, salary rise in India for 2011 is projected to be around 12.9 per cent higher than those received in 2010, which were at 11.7 per cent.
Also, the double-digit salary increases would continue for the next couple of years and is expected to be 12-15 per cent across industries, the survey says. India is followed by China and the Philippines, which have salary rise projections of nine per cent and seven per cent, respectively.
The findings mirror the optimism of the country with the GDP poised to grow at an above target of nine per cent, the survey says. According to the survey, engineering services, automotive, energy and infrastructure industries, which rely heavily on domestic investment and consumption, top the salary increase charts for the second year in a row.
These sectors are backed with cost effectiveness and capability to deliver high value complex services making engineering service sector’s long-term growth look robust with the highest salary increase projection of 14.4 per cent in 2011.
“We witnessed early signs of resurgence in India, and this translated to improved strategic spending on employees through salary increases, incentives and hiring.
Traditionally, salary increases in India are directly linked with the level of economic activity and talent demand and supply, but this year rising inflation is also playing a role in determining salary increase budgets,” said Sandeep Chaudhary, Regional Practice Leader, Compensation Consulting, Asia Pacific, Aon Hewitt.
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In fact, according to a recent study by naukri.com, most of the sectors indicate positive hiring sentiment for the coming months. The survey said that 80 per cent of recruiters anticipated new jobs to be created in the first half of 2011.
Information technology and outsourcing sectors are projected to see salary increases of 12 per cent and 11.9 per cent, respectively. The survey suggests the media industry would witness an average jump of 13.4 per cent in 2011.
| SALARY SURGE | |||
| Industries | 2011 Projection (%) | Industries | 2011 Projection (%) |
| Engineering Services | 14.4 | FMCG | 13.4 |
| Automotive | 14.0 | Pharmaceutical | 13.2 |
| Energy (Oil/Gas/Power) | 14.0 | BFSI | 12.7 |
| Infrastructure | 13.9 | Telecommunication | 12.5 |
| Chemicals | 13.8 | Retail | 12.4 |
| Engineering/ Manufacturing | 13.7 | Information Technology | 12.0 |
| Media | 13.4 | Outsourcing (ITES) | 11.9 |
Among the employee groups, junior manager/supervisor/ professional level employees are projected to see a hike of 13.3 per cent while the top/senior management staff are expected to get about 12.1 per cent rise this year.
The survey says high attrition is another factor that has contributed to the salary rise.
The survey says variable pay, as part of total compensation, is rising as entities are tying a greater percentage of salary to individual and overall company performance.
The Hewitt findings are based on a survey of 531 organisations conducted over December 2010 to January 2011.