New Delhi: Most of the Indian companies this year are likely to offer an average of 7.7% hike in salary to its employees, the India Salary Increase Survey by consulting firm Aon said on Wednesday. But this salary hike this year may not lead to increase in take-home pay if organisations choose to pay more in the provident fund (PF) contributions due to the new definition of wage code proposed by the Central government.
The latest salary increase survey further indicated that 88 per cent of the companies were willing to increase the pay of employees in 2021. The survey also predicted an average salary hike of 7.7 per cent for employees in India, higher than the 6.1 per cent in 2020. The AON for the survey has gathered responses from 1,200 organisations across 38 industries.
“There is a much higher percentage of companies projecting increments in the 5-10 per cent range as compared to 2020,” the survey said.
Roopank Chaudhury, a partner in Aon’s human capital business in India, told a news daily that the highest-paying sectors in 2021 will remain the same as 2020 — Information Technology, ITs, life sciences, e-commerce and FMCG.
However, employees who are working in e-commerce, VC-backed companies are likely to get the highest increment at over 10 per cent, followed by IT companies at 9.70 per cent. Moreover, IT companies are likely to give an average increment of 8.8 per cent, followed by the gaming or entertainment industry at 8.10 per cent. Those working in the chemicals industry are also like to get an increment of 8 per cent.
“We expect the increment dynamics for 2021 to play out over a longer period of time given the uncertainty and potential impact of forthcoming changes,” Nitin Sethi, partner and Chief Executive Officer of Aon’s performance and rewards business in India, said.
Sethi also noted that the proposed definition of wages under the new Wage Codes could lead to additional compensation budgeting in the form of higher provisioning for Benefit plans like gratuity, leave encashment and provident fund.