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. “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 13 percent, which is 1.1 percent higher than the India average. Infrastructure, heavy engineering, 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. Plagued by various regulatory hurdles, policy issues and the slowdown in the global economy; telecom and financial institutions have projected the lowest salary increases for 2012 at 11 and 10 percent, respectively.
According to yet another survey by global consulting firm Hay Group, the average salary of top CEOs in India has risen to Rs. 2 crore, up by close to 30 percent in the last one year. The study which covered 87 top Indian and MNC CEOs, operating across industry domains, found that some 50 percent of them are now in the Rs 2 crore per annum category and 12 percent are in the Rs 7 crore category. According to the study, the Indian CEO market has always seen a large pool of “operationally-excellent” CEOs, but a constant scarcity of “managing-business” CEOs, has driven compensation high. It is expected that compensation will further spiral upwards owing to the increasing cross-sector employability of the new breed of lateral CEOs. The study further points out that the average CEO’s salary is 2.6 times that of the rest of the executive population, in terms of total cost to company (CTC), excluding long-term incentives. However, there is very little total compensation differential between top executives across core and enabler functional roles.