According to a media report, AON Hewitt estimates better salary increase in the Telecom sector in the year 2018 (8.4%) after a record low in 2017 (7.5%).
Apparently, the driver for the same is talent retention. For the industry which has been marred with reduced profitability to the extent of going through consolidation to cut costs. In the past one year itself, because of employee right-sizing, the employee cost is now less than 5% of the revenue.
A decade from now the Telecom industry had seen raises around 17%. According to A Ramachandran, partner at search firm EMA Partners, “After (Vodafone and Idea cellular merger) approvals, telecom operators could roll out 10-13% raise for employees to retain them instead of 8-9% that was paid across hierarchy.”
Considering, that the talent in the telecom industry is extremely mobile, the hike is in accordance to the salaries offered by the industries where the employees could consider moving to.
The report also states that the top performers could get up to 1.8x times more salary than the average performing employee. These top performers would most probably be employees involved in digital businesses like mobile banking, health and education, data marketing, customer strategy and market segmentation.
Despite the optimism inherent in the findings of the report, there is also skepticism about the same. Kris Lakshminath, chairman of search firm Headhunters India, reportedly said that increases maybe very low as the proposed alliances have not become operational, and also because of companies continuing with cost-reduction initiatives.