New Delhi: People working in Indian companies will likely to get a better pay hike in the upcoming year compared to 2020, said a survey by global human resource consultancy Aon on Wednesday.
According to a Bloomberg report, at present companies are betting on higher consumer demand due to enhanced government spending and bumper rainfall to neutralize the pandemic-led economic contraction. Therefore, companies, spanning sectors including e-commerce, energy, financial institutions and pharmaceuticals are expected to offer an average hike of 7.3% to their employees in 2021.
In 2020, the average hike offered was 6.1% which is said to be the lowest in last 14 years, added the survey that collected data from 1,050 companies across 20 industries.
The survey noted that even though an inflated pay hike is not a given next year, at least 87% companies are planning pay hikes compared to 71% in 2020. While 47% of the companies are likely to offer over 8% hike compared to 44% in 2020, around 14% companies are expected to offer zero pay hike in 2021 versus 29% this year.
Speaking to Mint, a partner at Aon, and CEO of the firm’s Performance and Rewards Solutions practice in India, Nitin Sethi said, “Despite the gravity of the COVID-19 pandemic in India and its deep impact on the economy, organizations in India have shown tremendous resilience and a mature view on talent,” said Nitin Sethi.
“Business and HR leaders made hard decisions in second and third quarters of 2020 and are now betting on the green shoots of improving consumer demand. They see the need to invest in talent as a critical part of their recovery and growth prospects,” Sethi added.
Navneet Rattan, Director at Aon in India’s Performance and Rewards Solutions practice said the impact of COVID-19 has been “varied on different sectors and organizations. We see high differentials in salary increases – both intra and inter-industry. The difference between industries with highest increase to lowest increase hits 7.2% points as compared to mere 2.4% points in 2019.”
The Aon survey further added that the industries which are expected to offer the highest salary hike include– technology, life sciences, e-commerce, chemicals and professional services while companies in sectors such as hospitality, retail and real estate — severely battered by the pandemic — are projecting an increase but trail other sectors.