Given that the last two years were tough for the industry because of the COVID-19 Pandemic. According to a recent Salary Increase Survey by Aon, Corporates in India are likely to give out a salary hike of 9.9% this year, as against 9.3% in 2021.
The study that analysed data across 1,500 companies from more than 40 industries, noted that the industries with the highest projected salary increases are e-commerce and venture capital, hitech/IT and IT enabled services (ITeS) and life sciences.
Survey participants reported the highest attrition figure 21 per cent – in over a decade in 2021, the report said, adding that highest attrition in over two decades signifies the impact of ‘Great Resignation’ on India.
“Salary increases should come as a welcome break for employees amidst a volatile period. For employers, it could emerge as a double-edged sword when you combine the rising cost of talent with record-high attrition numbers,” Nitin Sethi, partner and CEO of Aon’s Human Capital Solutions in India said.
Sethi further noted that “this trend is fuelled by economic recovery and the need for organizations to invest in new-age capabilities to build a resilient workforce.”
As per the survey, a positive business outlook is resulting in a higher number of double-digit increments.
Around 88 per cent organizations foresee an improvement in business outlook in 2022, 11 per cent higher from 2021, the survey said, adding that 33 per cent organizations are expected to give double-digit salary increases in 2022 — an increase of 5 percentage points from 2021.
“We believe that the fundamentals of the Indian economy remain strong and that there is a positive business sentiment.
“Even sectors that struggled during the first wave of the pandemic, such as retail, logistics and quick-service restaurants, have bounced back by focusing on modern trade/digital channels, which is reflected in salary increases of 8 per cent and above,” said Roopank Chaudhary, partner in Aon’s Human Capital Solutions in India.
However, “we do see some potential headwinds due to anticipated high inflationary pressures and the still-prevalent COVID-19 threat,” Chaudhary noted.
Despite a tough few months with the second and third waves of infections during the COVID-19 pandemic, India continues to project the highest salary increases among the BRIC (Brazil, Russia, India and China) nations in 2022.
In Brazil, salary increments will be 5.0 per cent, Russia at 6.1 per cent and China at 6.0 per cent, as per the survey.