Indian companies are likely to offer an average salary hike of 10.8 per cent to employees in 2016 even as they become less optimistic over growth prospects for the country than they were in the first quarter of this year, consulting firm Towers Watson said on Thursday.
However, inflation can affect a significant part of this projected salary hike, the Nasdaq-listed firm said.
The projected increase in salary would be 4.7 per cent, factoring in inflation at 6.1 per cent, compared with 4.5 per cent last year, Towers Watson said in its 2015-16 Asia-Pacific Salary Budget Planning Report.
“Companies need to be smart about how they use limited salary budgets, because high volatility and talent crunches are causing frequent shifts to pay. Determining current pay rates for jobs in a highly competitive talent market is akin to shooting at a moving target,” said Sambhav Rakyan, data services practice leader for Asia Pacific at Towers Watson.
Survey results by the company for the third quarter of this year show a similar trend to those of the first quarter in terms of higher increases going to top performers.
The top performers are likely to see an average hike of 12.5 per cent in 2016, while “above average” and “average” performers could receive 11 per cent and 9.7 per cent, respectively.
Employees in the energy sector are expected to get the highest salary hike in 2016 at 11.5 per cent, while salary increase in high-tech and financial services sectors is likely to be 10.7 per cent and 10.4 per cent, respectively, it said.
Salary budgets in the APAC region are set to rise 6.8 per cent in 2016, up from 6.6 per cent in 2015.
The bi-annual survey compiled by Towers Watson’s data services practice. The survey was conducted in July and about 2,000 responses were received from companies across 22 countries in Asia Pacific.