India Inc. is likely to see an average salary increment of 9.8% in 2023, according to Korn Ferry’s latest India Compensation Survey.
The survey, which covered 818 organisations with more than 800,000 incumbents across sectors offering insights on 15 industries, 75 sub sectors, 75 job functions and 1345 unique jobs, showed growth across sectors which translated to a marginally increased forecast of 9.8% viz-a-viz 9.4% in 2022.
While the pandemic had brought down the increment drastically to 6.8% in 2020, the current growth trend reflects the resilience and ability of leaders and employees to reimagine and rebuild for a sustainable future.
The survey reflects salary increase projections across sectors:
- Services – 9.8%
- Construction and Building Material – 9.1%
- Life Sciences and Health Care – 10.2 %
- Utilities – 8%
- Automotive – 9.0%
- Chemical – 9.6%
- Consumer Goods – 9.8%
- Retail – 9.0%
- High Technology – 10.4%
- Industrial goods – 9.9%
Fixed annual cash in compensation structure (Total Cost to Company) continues to comprise the biggest proportion of salary of local employees in the India market. As employees move up the ladder, compensation structure allows for more benefits and variable pay while base salary and allowances fall.
Employees in Tier 1 cities continue to receive higher compensation in India, when compared with Tier 2 and Tier 3 cities.
However, with hybrid model and remote work developing into an accepted norm, we are seeing a shift towards work becoming location agnostic, aiding Tier 2 cities such as Ahmedabad and Pune in giving competition to tier 1 cities in fixed annual cash received by employees.
“Although recession and economic slowdown are being discussed across the globe, there is an optimism about the Indian economy with a projected GDP growth of 6% upwards. While the macroeconomic outlook is positive, there are new and increasing pressures on businesses: changing customer preferences, digital transformation, increased collaboration, and more. To this effect, organisations are focused on retaining critical and key talent through various talent management initiatives and formal retention and compensation plans,” said Navnit Singh, Chairman and Regional Managing Director, Korn Ferry.
Singh added that to stay ahead, most businesses will need to transform their workforce to meet these demands. “Also, with 60% of the organisations in our survey indicating that they have adopted some kind of a hybrid model, it is prudent to say that the world of work is changing fast—not only the work organisations do, but how they do it.”
In alignment with India’s focus on accelerated digital capability building, the survey has projected substantial increments in life sciences and healthcare and high technology sectors at 10.2% and 10.4% respectively.