The auto sector records a marginal dip since 2012 with median increments projected at 12 per cent as compared to 12.5 per cent in 2012
The Mercer Total Remuneration Survey released on March 6, 2013 projects an upbeat mood for India Inc despite the economy growing at the slowest pace in the last decade. The survey, released every six months, provides an overview of the increments, variable payout and throws a spotlight on talent which will be in demand in the coming year.
The survey findings predict a 12 per cent median salary increase across industries, with the Pharmaceutical sector leading the pack at an expected median increase of 12.5 per cent. The survey gave Heads of Organisations in the pharmaceuticals sector a reason to celebrate, projecting their increments to be the highest at 13 per cent as compared to other industries. That the pharmaceutical sector is upbeat was also reflected in the Aon Hewitt salary increase survey, released on February 20, 2013.
The auto sector records a marginal dip since 2012 with median increments projected at 12 per cent as compared to 12.5 per cent in 2012. Muninder Anand, Director, Information Solutions at Mercer India says that the dip is because of the new found focus on sales incentives which were not prevalent in the sector prior to this.
The survey also shows a shift towards achieving optimum productivity in order to contain costs in organisations. To drive this behavior they are moving from a fixed pay approach to one that relies on an optimum mix of fixed and variable pay, across levels.
The variable pay forecast for 2012 across industries is ranging from 17.2 per cent to 25.5 per cent. Interestingly variable pay-outs at 25.7 per cent are projected to be the highest in the Hi-Tech industry, closely followed by Pharmaceuticals and Oil & Gas sector at 23.5 per cent and 20.0 per cent respectively.
The projection for Sales Incentive payout for 2012 at 24.8 per cent is higher as compared to the actual payout of 22.9 per cent in 2011 for all sectors, except the Chemical and Hi-tech sectors, which record a marginal decrease as compared to last year. The spotlight here is on the Oil & Gas industry which has substantially increased the target sales incentives to 37.4 per cent as compared to the actual payout of 18.2 per cent in 2011.
Three out of four companies indicated that they will be increasing headcount which forms a remarkable 72 per cent. In addition, India continues to be viewed as a hub for R&D, with many organisations investing in R&D centres across industries. These two factors combined will fuel the war for talent and Engineers, Research & Development (R&D) professionals followed by Sales and marketing—positions which are reportedly challenging to recruit and retain, will be the most sought after, says the survey.
Employee turnover also continues to be a prime concern especially at the junior management level, across industries, with highest attrition being reported in the auto sector.
Anand sums it up, “Corporate sentiment is cautiously positive, though companies are adopting a wait-and-see policy. Our research suggests that companies are not looking at holding back increments in 2012, but are likely to be more selective. Performance based pay and rewards will gain prominence in the appraisal cycle. Hiring will still continue to be on the agenda for most companies in 2013.”