Gone are the days when double-digit salary increases were a given. In fact, salary hikes may not even remain an annual exercise, going ahead, finds a survey conducted by talent solutions provider Aon Hewitt.
However, on the brighter side, India Inc. may not see significant job cuts in 2017 with the exception of a few industries.
The survey, which polled 1,003 respondents, projected an average pay hike of 9.5% for 2017 – the lowest since the 6.6% increase in 2009 following the global recession and a shade lower than the 10.2% recorded in 2016. The past decade has seen a gradual decline in salary hikes from the 2007 levels, when the average count was at 15.1%.
Despite the slowdown, India remains a bright spot for salaried individuals, with China’s projected salary hikes at 6.9%, Japan 2.4%, Australia 3.2% and Philippines at 6%.
Besides, performance will pay a defining role in determining compensation for India Inc, given that the number of employees in the did-not-meet-expectations category has consistently gone up in both manufacturing and services companies, while the percentage of top performers have shrunk to 7.3%.
With tighter budgets, it has, in fact, become imperative for companies across industries to ensure that their top talent is identified and remunerated accordingly, giving way to higher pay differentiation between top and average performers
“The trend this year reflects a gradual slowing of pay increases and higher emphasis on productivity and performance – quite literally a ‘graying’ of salary budgets for India,” says Anandorup Ghose, partner at Aon Hewitt India.
The survey shows that consumer Internet companies, life sciences and professional services will top the chart with better average pay hikes, but financial institutions and infrastructure companies will be more stringent with their purse strings. Interestingly, many consumer internet companies in India are backed by venture capital funds.
The survey also reveals that 67.5% of the respondents are optimistic about business outlook for 2017.
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