According to the recent survey by Willis Towers Watson, salaries in India are projected to rise 10 percent in 2020.
The increase is marginally higher than the actual increase (9.9 percent) in 2019, according to the latest Q3 2019 Salary Budget Planning Report released by WTW. The report looks at a range of job grades across various industry sectors and is designed to provide companies with guidance for their annual salary forecasting for the year ahead.
While salary increases in India are stabilizing around the 10 percent mark, they remain the highest in the Asia Pacific region. Indonesia is projected at 8 percent, China at 6.5 percent, Philippines at 6 percent, Hong Kong and Singapore both at 4 percent.
Sharing his perspective on the findings, Rajul Mathur, Consulting Leader – Talent & Rewards, Willis Towers Watson India said, “Though salary increases in India still continue to be among the highest in the region, companies are taking a cautious approach and do not intend to make any significant changes from previous years. Companies are beginning to make selective skill-based compensation adjustments to cater to requirements around automation and digitisation.
Going forward, organizations should continue to re-examine the alignment between their business and talent strategies, as well as how to remunerate and reward different segments of the workforce considering their core contribution to business success.”
Key findings from the report suggests:
While most sectors like General Industry, Chemical, High Tech and Pharmaceuticals can expect salary increases around average mark of 10%, Energy, Financial Services and Consumer Products sectors stand out for the highest year on year growth. The Energy sector is expected to see a jump from 8.5 percent in 2019 to 9.3 percent in 2020, the Financial Services is projected at 9.7 percent in 2020 from 9 percent last year and the Consumer Products sectors is expected to see an increase from 9.5 percent in 2019 to 9.9 percent in 2020.
Median salary increase at the Executive level for 2020 is projected at 10.1 percent, a noteworthy increase from 9.6 percent in the previous year. For Middle Management, Professional and Support Staff, an increase from 10.1 percent in 2019 to 10.4 percent in 2020 is projected. The employee group of Production Manual Labour is also projected to receive a higher salary increase of 10.3% as compared to 10 percent last year.
On salary increases by performance levels, the survey found that on an average, 25 percent of the salary increase budget is being allocated to top performers, which represents 11.5 percent of employees in India. This implies that for each INR 1 allocated to an average or below-average performer, INR 2.16 is allocated to a top performer compared to about INR 1.3 last year.
Arvind Usretay, Director, Rewards, Willis Towers Watson India said, “Attracting and retaining the right talent at leadership positions is commanding higher pay increases as the leadership pool continues to be limited. The increase is mostly in terms of variable pay as there is greater focus on pay for performance. That said, companies are also working towards more robust succession planning programmes in order to develop a sustainable leadership pipeline.”