There is a reason to cheer for working professionals: salary increments across sectors are expected to touch 9.9% in India this year. It’s the first time the increase in the compensation has reached such a high since 2016 (that year, salary growth had touched 10.2%), finds the recent AON Annual Salary Increase Survey report that was released today.
The attrition rate, however, stands at 21%, the highest in a decade, across sectors. Over half of this, about 15.4%, is voluntary attrition, indicating that the war for talent will not abate any time soon.
The 26th edition of the survey, which was conducted between December 2021 and January 2022, collated data from 1,500 organisations across 40 sectors. According to the findings, over 32% companies are planning to offer a salary increase of 10% and more, while nearly 46% are planning to give out 8-10% hikes this year, as compared to last year.
Perhaps predictably, e-commerce, venture capital, hi-tech and IT, ITeS and life sciences are the sectors at the forefront of the highest projected salary increase. Even sectors like QSR (quick service restaurants), cement, transportation, metal and mining, all of which were severely impacted by the covid-19 pandemic, are showing good recovery by projecting an 8% increase in their compensation packages.
The services sector is expecting a 10.6% salary increase, compared to 9.2% salary hike projections from the manufacturing sector. Interestingly, though, the former is also plagued by massive attrition. While 65% firms overall indicated attrition rates of over 20%, this figure rose to 71% for the services sector.
Besides the increase in monetary compensation, the number of employees being rated in the top two performance segments - ‘far exceeding expectation’ and ‘often exceeds expectation’ has gone up. “We are seeing 36% of the people in the top two categories compared to what 30% or less in the past. That’s a significant increase. The other thing we are noticing is how companies are protecting their top talent especially with 2022 expected to be a growth year,” says Jang Bahadur Singh, senior consultant, human capital solutions, AON.
Organisations are aggressively differentiating top performers from the rest and trying to make them feel special with a salary increase of up to 1.7 times more than what firms would have offered in a regular year. This again is a marked jump in salary increase multiplier index, says Singh. “What was surprising for us was the extent of the convergence that’s happening for deep tech roles even in non-traditional tech firms. They are also talking about the top five or six tech skills like data analytics, AI, etc."
Meanwhile, India continues to have predict higher salary increase projection rate in comparison to BRIC nations and other developed economies. Against the 9.9% projection made by India Inc, the salary hike is expected to be 5% in Brazil, 6.1% in Russia, and 6% in China after offsetting inflation, the report states.