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Indian Inc likely to raise base salaries by 10.5% in 2016: Mercer

14 January, 2016

Indian organisations are likely to raise base salaries this year by 10.5 per cent across industries and career levels, while 48 per cent of them are expected to increase their headcount, according to a survey conducted by New York-based human resources consulting firm Mercer.

The salary increase forecast for 2016 is quite similar to the actual salary raise for 2015.

As per Mercer’s ‘All Industries Total Remuneration Survey’, the projected salary hike is likely to range from 10 per cent to 11 per cent overall. However, life sciences, IT and chemical industries may see a relatively higher increase in salary compared with other industries. The survey represents 691 organisations across industry sectors.

This year, one in two companies are looking to raise headcount with hi-tech, shared services and life sciences leading the pack.

While salary hike differentiation has narrowed down across industries over the years, there was a considerable pressure on talent retention as budgets remained tight, as per the survey.

On the other side, there was an increase in variable bonus pay across industries from actual payout of 14.7 per cent in 2014 to a projection of 15.4 per cent in 2015.

Variable bonuses paid out in 2014 were the highest in the hi-tech space at 22.4 per cent of annual guaranteed cash, followed by the consumer sector at 15.5 per cent.

“Largely, the current pay increase points toward an optimistic economic outlook driving positive sentiment, with companies expecting to increase their headcount,” Ruchika Pal, principal and India TRS product leader, Mercer, said in the statement.

“The salary forecasts are the lowest for consumer, auto and shared services, seeing a dip in salary projections for 2016. Companies in India are assertive of their growth plans and will continue to hire, especially engineers and computer science experts,” she said.

With regard to attrition, the overall actual attrition in 2014 was 12.6 per cent, with highest attrition reported in shared services at 17.8 per cent, followed closely by the consumer sector at 17.6 per cent.

From a retention standpoint, sales professionals across levels continue to challenge organisations. While hiring, organisations find it hard to attract R&D and engineering professionals, the survey showed.


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Indian Inc likely to raise base salaries by 10.5% in 2016: Mercer

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