Increments in 2017 would be less than in 2016, an Aon Hewitt survey said on Wednesday. Raises have been declining since 2007.
“The survey projects a drop in pay increases to an average of 9.5 per cent across industries. While it’s a marginal decrease from the 2016 (10.5 per cent) spends, it reflects maturity that India Inc has displayed amid global and Indian economic and political events. This includes recent changes in the US government and the much-talked demonetisation,” the report said.
Aon Hewitt, the global talent, retirement and health business of Aon plc, conducted its 21st annual survey after speaking to more than 1,000 companies.
The survey said India would be the worst hit among the Asia-Pacific countries. Salary increases in countries such as Japan, China, Australia, Singapore, the Philippines, and Malaysia would remain almost the same.
Attrition for India, at 16.4 per cent, was the lowest among emerging markets and has remained constant. Attrition was high among entertainment and media (11.8 per cent), retail (10.7 per cent), engineering services (8.2 per cent), telecom (7.6 per cent), metals (7.7 per cent), information technology (8.7 per cent) and financial (6.7 per cent) sectors.
The survey said consumer internet companies, life sciences, professional services, chemicals, entertainment media, automotive/vehicle manufacturing, and consumer products would see salary growth in double digits in 2017.
The gradual slowing of pay increases over the past few years (from 15.1 per cent in 2007 to 9.5 per cent in 2017), and higher emphasis on performance indicated the “greying” of salary budgets in India.
“Political changes and economic headwinds have had an impact on business performance. However, the trend this year reflects a gradual slowing of pay increases and higher emphasis on productivity and performance,” Aon Hewitt India partner Anandorup Ghose said.
“In the last few years, India has seen good numbers in terms of salary increases, more than 11 per cent. But over the next few years, we won’t see the numbers going so high.” Key talent is getting 1.8 times the salary of an average performer.
For key talent management, companies are resorting to various initiatives such as career development, learning and development, international and functional mobility and leadership access, among others.
