Top performers likely to get a hike of up to 15.4%: Aon Salary Survey
The Aon Annual Salary Increase Survey (SIS) 2018 that was released in February 2018 established that the average increase in Indian wages in 2018 is set to be between 9.4% and 9.6%. And top performers might get a hike of up to 15.4%. While the focus of the survey was to analyze salary increments in different industries, the results of the survey contained several other important and insightful findings as well. The survey gathered data from over a 1,000 companies, spread across over 20 industries, and as a result, the findings are bound to be comprehensive and nuanced. Here’s taking a look at some of the other interesting Indian conclusions of the survey:
Indian companies have improved in dealing with the following challenges over the last one year:
- Low employee productivity
- Poor availability and selection of talent
- Inability to retain talent
- Inability to attract talent
- Inadequate leadership pipeline
Key Talent Risks:
- Rising salaries
- Critical Skills Shortage
Global Salary Increases:
- Argentina: 23.3%
- Canada: 2.9%
- Egypt: 11.5%
- Ghana: 10.5%
- India: 9.4%-9.6%
- Indonesia: 7.9%
- Ukraine: 10.0%
- U.K: 2.9%
- Uruguay: 8.3%
- U.S.A: 3.0%
- Venezuela: 112.3%
- Vietnam: 9.2%
- Yemen: 7.7%
- Zambia: 10.9%
The lower percentage of salary hikes in developed countries like USA and UK is being correlated to the lower inflation rates, the report concluded after analyzing a decade of data on inflation and salary increases. In countries like India and Brazil, the report adds, “high inflation can contract real wage as employer’s ability to provide permanent salary increase gets limited.”
The top reasons for a low pay hike that were given by Indian organizations this year are:
- Cost Reductions
- Economic uncertainty
- Shift to variable pay from fixed pay
- Current pay levels exceed market rates
Top reasons for Employee Retention in the last year are as follows:
- Accelerated career development opportunities
- Work-life balance
- Fair and equitable treatment in rewards
- Cross-functional mobility
- Leadership accessibility
Top reasons why employees leave an organization are as follows:
- Limited Growth Opportunities
- Better External Opportunities
- Role Stagnation
- Higher Education
The report also suggests that the convergence of the ratio of salary increases to GDP growth rates for Indian and global organizations is a healthy sign of alignment of Indian and global trends. Furthermore, the survey noted that nowadays, pay hikes are driven more by bonus and incentives, as companies are witnessing a tightening compensation budget. Taking into account the base effect, it added, helps rationalize the cost for rewarding junior management and top performers. In terms of HR, the report also suggests that the confidence and maturity of HR practices are supporting pay hikes for top performers as opposed to the average employee.
As the results of the survey indicate, being a top performer can result in a salary increase nearly twice the size of an average employee in India. Experts are already opining that regular pay hikes could shrink further in the future, as we move into a paradigm that focuses on rewarding top performers who bring more value and results. Other reports have also pointed to the fact that critical skill shortage is the biggest talent related challenge leaders face today and the fact that employees are increasingly viewing professional development and a healthy work-life balance as essential offerings by an employer. One thing is for certain, with such an accelerated pace of evolution of the workplace, the way we work is changing more swiftly than ever before. By that extension, the way remuneration and rewards are structured is also at the threshold of a change. With the demand for niche skills increasing, automation and gig economy taking mainstream precedence in the global work economy, the times ahead are sure to bring with themselves new and exciting challenges to solve. Leaders, employers, and the HR must gear up to propel and implement transitions that might as well set the rules for the foreseeable future.
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