Salary increases in India are projected to be 11.9 per cent in 2012, according to global human resource consulting and outsourcing company Aon Hewitt. The projections for 2012, in the 16th Annual India Salary Increase Survey, were marginally lower compared to the actual increase of 12.6 per cent in 2011.
Compared to other markets, India outpaced Asia Pacific with the highest salary increase in the region, followed by China and the Philippines, projecting a 9.5 per cent and a 6.9 per cent salary increase in 2012 respectively. "The number mirrors a positive yet cautious outlook as organisations strive to take a balanced view in light of the uncertain economic environment,” the survey said.
Sandeep Chaudhary, Practice Leader, Compensation Consulting, commented, “The economic growth in 2011 was hit by stubbornly high inflation, high interest rates, a slowing global economy and a policy paralysis in India. However, we are seeing encouraging signs in recent weeks on business sentiments. While organisations across industries are keeping a watchful eye on this oscillating macro-economic environment, the number reiterates that organisations are taking a long-term view on talent.”
| SALARY SLIP Pay package increase projections (in %) | |||
| 2010 | 2011 | 2012 | |
| Employee levels | |||
| Top/Senior Management | 11.1 | 11.2 | 11.1 |
| Middle Management | 12.0 | 12.5 | 12.0 |
| Junior Manager/Sup/ Prof. | 12.4 | 12.7 | 12.3 |
| General/Entry Staff | 11.4 | 12.0 | 11.8 |
| Across Industries | |||
| Overall | 10.6 | 12.9 | 11.9 |
| Pharmaceutical | NA | 13.2 | 13.3 |
| Engineering Design/Services | 12.6 | 14.4 | 13.0 |
| Infrastructure | NA | 13.9 | 12.9 |
| Chemicals | NA | 13.8 | 12.6 |
| Engineering/Manufacturing | NA | 13.7 | 12.4 |
| FMCG/FMCD | NA | 13.4 | 12.4 |
| Automotive/Vehicle Manufacturing | NA | 14.0 | 12.4 |
| High Tech/Information Technology | 8.9 | 12.0 | 11.9 |
| Retail | 11.1 | 12.4 | 11.8 |
| IT Enabled Services (ITeS) | NA | 11.9 | 11.8 |
| Energy (Oil/Gas/Coal/Power) | NA | 14.0 | 11.8 |
| Metals | NA | NA | 11.3 |
| Telecommunication Services | NA | 12.5 | 11.0 |
| Financial Institutions | 10.5 | 12.7 | 10.0 |
| Source: Aon Hewitt India Salary Increase Survey | |||
The frontrunner for this year’s salary increase is likely to be in the pharmaceutical industry, with a projection of 13.3 per cent for 2012, riding high on a surging year-on-year growth with a CAGR of 11 per cent. The second highest salary increase is projected to be in the engineering design/services with a salary increase of 13 per cent, which was 1.1 per cent higher than the India average.
Infrastructure, heavy engineering and fast moving consumer goods (FMCG) and fast moving consumer durables (FMCD) sectors would continue to get higher salary increases than the country average in 2012. The automobile sector will have a marginal salary increase over the India average, owing to better volumes for January 2012
The power sector is projected to have a modest 11.1 per cent salary increase, propelling the projection for energy sector down to 11.8 per cent. This sector had topped the chart last year. The Indian information technology (IT) and outsourcing sectors reported a relatively positive outlook on salary increases (11.9 per cent and 11.8 per cent respectively), despite their continuing concerns with the global economy. The depreciation of the rupee against the dollar, growth in emerging verticals such as retail, healthcare and utility, new business models and organisation efficiencies among others are found to be the key contributing factors.
Telecom and financial institutions projected the lowest salary increases for 2012 at 11 per cent and 10 per cent respectively.
According to the survey, this is due to the sector being plagued by various regulatory hurdles, policy issues and the slowdown in the global economy.
While the projections across all levels of management are lower than 2011, junior and middle managements are expected to get the highest increase for 2012 (12.3 per cent and 12 per cent respectively). Among the other emerging trends, salary increases provided to critical talent are consistently two to three percentage points more than the overall increments in an organization for three years in a row now. This highlights that India Inc is concentrating its efforts on identifying top talent and rewarding them accordingly. Spending on variable pay as part of total compensation is also seen to be steadily growing over the past decade.
The survey covered 550 organisations representing 19 primary and 31 sub-sectors. The data for the survey was collected over November 2011 to January 2012.
