Despite demonetisation, Brexit and recent changes in the US government, India Inc. will still be doling out an average pay hike of 9.5 per cent across industries in 2017, according to projections made by Aon Hewitt, the global talent, retirement and health business of Aon.

While this is a dip from 2016 when projected hikes were in double digit (10.2%), India is still giving out the largest pay hike in Asia. Compared to Japan (2.4 per cent) , Singapore (4.1 per cent) and China (6.9%) , Indian employees stand to get a better salary increase.

Said Anandorup Ghose, Partner at Aon Hewitt India , "India has highest inflation adjusted salary increase compared to rest of Asia. While the rest are averaging 2.5 per cent, India is getting 6 per cent."

While traditionally pay increases in India have not been affected by inflation rates, the drop in Consumer Price Index over last quarters could have been a factor in compensation planning.

However, Ghose feels that India Inc is handling external shocks with maturity this time. And has not administered too many harsh measures. In 2009, when global financial crisis gripped the world, pay hikes in India dropped to 6.6 per cent.

Higher emphasis on performance

Even as the masses will see a drop in pay hike, key talent will be rewarded more. Pay differentiation between top and average performers has increased. Top performers could stand to get 15 per cent to 18 per cent hike. However, the number of talent identified as top performers has seen a drop - just 7.5 per cent of employee pool is segmented as high performing, the lowest number in the 21 years that Aon Hewitt has been doing its salary survey.

The study analysed data across over 1,000 companies and 5 levels of management. It was conducted in end December 2016 and January 2017 and so factors in impact of demonetization.

Sectors such as Life Sciences, Professional Services, Chemicals, Entertainment Media, Automotive and Consumer Products continue to project a double-digit salary increase for 2017. However, they have taken a drop from their 2016 actual spends.

Attrition rate lowest in five years

The attrition rate in India was similar to 2015 at 16.4%. While attrition was contained at a broader level, key talent attrition increased from 7.3% in 2015 to 12.3% in 2016.