India Inc will see the highest rise in salaries among Asia-Pacific countries this year, led by sectors like engineering, procurement and construction, banking, finance and insurance, retail and IT, according to a study by Hewitt Associates.
Indian wages will rise by 10.6 per cent, compared to 6.6 per cent in 2009, said the Hewitt India Salary Increase Survey 2009-2010. The salary hike will be across all the levels.
“The economy has shown faster recovery in sectors that rely on domestic growth and consumption, while recovery in sectors that have global dependence is expected to gain speed by mid-2010. This growth and the fact that 2009 saw a lot of salary freeze and salary cuts, are providing an impetus for healthy increase in compensation for employees,” said Sandeep Chaudhary, leader of Hewitt’s Performance and Rewards Consulting practice in India.
The survey covered 465 companies across 20 primary industries. The findings say domestic companies are expected to outperform MNCs with a projected average salary increase of 11.4 per cent as against a 10.2 per cent by the latter.
Nevertheless, the slowdown has brought a definitive change in compensation philosophy. Salaries in 2010 will see a rise in the variable component. Variable pay as part of total compensation will increase to 24.8 per cent in case of top executives, from 20.8 per cent in 2009. In case of senior management, the variable component is expected to go up to 20.5 per cent, from 17.1 per cent last year.
India Inc also saw sharper performance differentiation. Those employees, who exceeded expectations, received a salary hike of 13.4 per cent in 2009 when the industry average was 6.6 per cent.
