Your salary hike in 2020

Companies are expected to increase average pay by 9.1% in 2020 vs 9.3 % in 2019

Slowdown in the economy is reflected in subdued salary increase projections in the country. The average pay increase in 2020 is projected to grow at 9.1 percent, which is the highest in the Asia Pacific region but is at its lowest level since 2009, says Aon study. Aon plc, a leading global professional services firm, released the 24th edition of its annual Salary Increase Survey in India.

“Some bad news as the appraisal season kicks off. Salary increases across India’s organized sector will grow at the slowest pace in over a decade and 20 basis points lower than last year.”

• E-commerce and professional service firms are expected to give a 10% pay hike each in 2020.
• The transport and logistics sector, at 7.6%, ranks the lowest in the projected salary hike for 2020.
• Auto sector, which has been worst hit by the ongoing slump, has reported the biggest drop in average pay hike from 10.1% in 2018 to 8.3% for 2020.
• Pharma, professional services, firms likely to beat the average and offer double-digit hikes.
• Employees in Hitech/IT sector, ITeS, FMCG and chemicals also likely to get better increments (close to 10%)
• Hospitality firms/restaurants, real estate, automotive and telecom firms come next (8.2-8.5% hikes)

According to Tzeitel Fernandes, Partner, Rewards Solutions at Aon, a big reason for India’s higher salary increase in the Asia Pacific, as compared to other growing economies, is the high inflation rate and the war for key talent and niche skills. She attributed lower GDP forecast and weak consumer sentiment as the primary reason behind their lowest ever prediction in a decade. 

Very recently, Moody’s Investors Service slashed India’s GDP growth forecast for 2020 to 5.4%. According to the survey, hikes given by companies have been declining post the year 2011, when the average salary increase stood at 12.6%. This year’s survey analyzed data of over a thousand companies from more than 20 industries. 

The survey by Aon, covered more than 1,000 companies, across more than 20 industries. The firms were split equally between the manufacturing and service sectors.