The double-digit salary increases are back in the country.
Salaries in India are expected to increase by 10.4% in 2023, compared to an actual increase of 10.6% to date in 2022, which is slightly higher than the 9.9% increase projected in February, as per the latest Salary Increase Survey in India released by global professional services firm Aon plc.
Furthermore, the attrition rate for the first half of 2022 continued to be high at 20.3%, only marginally lower than the 21% recorded in 2021, thus retaining the pressure on salaries. This trend is expected to continue for the next few months.
The study, which analysed data across 1,300 companies from more than 40 industries in India, also found that four out of the five sectors that are expected to have the highest projected salary increase are technology related and experience the highest volatility and impact of current global economic uncertainty.
With an expected salary increase of 12.8%, e-commerce leads sectors with the highest projected increase, followed by start-ups at 12.7%, hi-tech/information technology and information technology-enabled services at 11.3%, and financial institutions at 10.7%.
“Despite the global recessionary headwinds and volatile domestic inflation, salary increases projected in India for 2023 are in the double digits. This increase is a reflection of the confidence that corporate India has on its strong business performance. Business leaders, however, must make decisions that ensure their workforce remains resilient today as well as into the future. They need to review their total rewards strategies and balance the impact of rising costs and salary pressures with a relatively high rate of attrition and the ongoing demand for critical talent,” said Roopank Chaudhary, partner, Human Capital Solutions at Aon in India.
“Volatility is a key determinant of salary increases by industries – the top salary increases are in the most volatile industries. As the broader economic circumstances impact the talent landscape, businesses must create holistic rewards strategies unique to their situation and sector to retain and attract the talent they need. Data-driven insights give employers the clarity and confidence needed to make better decisions and build a resilient workforce across sectors,” added Jang Bahadur Singh, director, Human Capital Solutions at Aon in India.