2020 average salary hike projected at 9.1 per cent

NEW DELHI:  Average pay increase in 2020 is projected to grow at 9.1 per cent, which is highest Asia Pacific region but is at its lowest level since 2009, says a new study. Companies in India gave better hike at 9.3%in 2019. This year’s Aon Salary Increase Survey shows that e-commerce and early-stage companies, and professional service providers will see the highest salary increase of 10%, while transportation and logistics firms will pay the lowest increments at 7.6%.   Crisis hit auto sector, where lakhs of jobs were slashed last year, will see the biggest drop to 8.3% average salary increase from 10.1 per cent in 2018.

According to Tzeitel Fernandes, Partner, Rewards Solutions at Aon, a big reason for India’s higher salary increase in Asia Pacific, as compared to other growing economies, is the high inflation rate and the war for key talent and niche skills. She attributed lower GDP forecast and weak consumer sentiment as the primary reason behind their lowest ever prediction in a decade. Very recently, Moody’s Investors Service slashed India’s GDP growth forecast for 2020 to 5.4%. According to the survey, hikes given by companies have been declining post the year 2011, when the average salary increase stood at 12.6%.This year’s survey analysed data of over thousand companies from more than 20 industries. 

Despite the dip in the projections, two out of five participating companies are projecting a double-digit increase, expecting a positive economic outlook.“We see a reduction in the differences between pay increases across industries, with 85% of the organizations projecting between 7%-11% - a sign of maturing business ecosystems. However, the premium for high performance and new age skills continues to rise” said Navneet Rattan, Director, Organization, Performance and Rewards, Aon India.

Double-digit salary hikes now history 

As per the results, companies in India gave an average pay increase of 9.3% during 2019, reflecting a slowdown in the economy compared to 2018.