News: Aon Hewitt forecasts salary increase for India Inc

Compensation & Benefits

Aon Hewitt forecasts salary increase for India Inc

Salary increases in India are projected to be 11.9 percent, marginally lower than the actual increase of 12.6 percent in 2011
 

The front runner for this year's salary increase is the Pharmaceutical Industry, with a projection of 13.3 percent for 2012

 

According to Aon Hewitt’s 16th Annual India Salary Increase Survey, salary increases in India are projected to be 11.9 percent, marginally lower than the actual increase of 12.6 percent in 2011.The number mirrors a positive yet cautious outlook as organizations strive to take a balanced view in light of the uncertain economic environment. As compared to other markets, India has outpaced Asia Pacific yet again with the highest salary increase in the region, followed by China and the Philippines, projecting a 9.5 percent and a 6.9 percent salary increase in 2012, respectively.

“The economic growth in 2011 was hit by stubbornly high inflation, high interest rates, a slowing global economy and a policy paralysis in India. However, we are seeing encouraging signs in recent weeks on business sentiments. While organizations across industries are keeping a keen and watchful eye on this oscillating macro-economic environment, the number reiterates that organizations are taking a long-term view on talent,” said Sandeep Chaudhary, Practice Leader, Compensation Consulting.

The front runner for this year’s salary increase is the Pharmaceutical Industry, with a projection of 13.3 percent for 2012, riding high on a surging year-on-year growth with a CAGR of 11 percent. With a CAGR of 15 percent, Engineering Design/Services projects the second highest salary increase of 13percent which is 1.1 percnet higher than the India average. Infrastructure, Heavy Engineering and Fast Moving Consumer Goods (FMCG) and Fast Moving Consumer Durables (FMCD) sectors continue to get higher salary increases than the country average for the second year in a row.

The Auto sector has edged a marginal salary increase over the India average. Auto volumes for January 2012 were largely in line or marginally better than estimates across segments and players. It is expected that the pent-up demand owing to last year’s supply constraints will support the growth in 2012-13 as supply eases. The Power sector, affected extensively by the fuel (coal) price problem, project delays due to challenges in land acquisition, and regulatory and environmental clearances, projects a modest 11.1 percent salary increase, pulling down the Energy sector (Oil/Gas/Coal/Power) projection to 11.8 percent. This is a significant change from last year when this sector topped the charts.

The Indian Information Technology (IT) and Outsourcing sectors report a relatively positive outlook on salary increases (11.9 and 11.8 percent respectively), despite their continuing concerns with the global economy. The depreciation of the rupee against the dollar, growth in emerging verticals such as retail, healthcare and utility, new business models and organization efficiencies, among others, have been the key contributing factors.

Telecom and Financial Institutions are projecting the lowest salary increases for 2012 at (11 and 10 percent ), plagued by various regulatory hurdles, policy issues and the slowdown in the global economy.

While the projections across all levels of management are lower than 2011, junior and middle management are still expected to get the highest increase for 2012 (12.3 and 12 percent, respectively).
 

Read full story

Topics: Compensation & Benefits, #Updates, #TotalRewards

Did you find this story helpful?

Author

QUICK POLL

How do you envision AI transforming your work?