India Inc to dole out average 9.1% salary hike in 2020: Report
New Delhi, Feb 18 : Companies in India are projected to dole out an average salary hike of 9.1 per cent this year, the highest level in the Asia Pacific region, as they look for key talent and niche skills, says a report.
However, the quantum is lower than 9.3 per cent increase seen in 2019 and also the lowest in a decade.
Leading HR consultancy Aon’s annual salary hike survey released on Tuesday also showed that around 39 per cent of the companies surveyed are expected to give as much as 10 per cent increase in pay.
The results are based on responses from over 1,000 organisations spread across more than 20 industries.
In the Asia-Pacific region, India is expected to dole out the highest salary hike at 9.1 per cent, followed by China at 6.3 per cent this year.
For India, the previous lowest quantum of hike was 6.6 per cent in 2009, as per Aon.
As per the survey, Philippines is anticipated to see a salary rise of 5.8 per cent, followed by Malaysia (5.3 per cent), Singapore (3.8 per cent) and Australia (3.1 per cent) in 2020.
“Despite economic challenges in 2019, organisations in India are taking a positive view. Pay increases in India continue to be the highest in the region,” Tzeitel Fernandes, Partner (Rewards Solutions) at Aon told reporters here.
A big reason for India’s higher salary increase, as compared to other growing economies, is the high inflation rate and the war for key talent and niche skills, Fernandes noted.
In 2019, companies in India gave an average pay increase of 9.3 per cent, reflecting a slowdown in the economy compared to 2018, the survey said.
According to the survey, 39 per cent firms are expected to raise the salary over 10 per cent while 42 per cent would go for an increase between 8-10 per cent.
In the manufacturing segment, pharmaceuticals is expected to give the highest salary hike followed by FMCG and chemicals, among others.
E-commerce and professional services businesses are expected to give double-digit salary increase this year in the services sector.
“We see a reduction in the differences between pay increases across industries, with 85 per cent of the organisations projecting between 7-11 per cent, a sign of maturing business ecosystems.
“However, the premium for high performance and new age skills continues to rise,” Navneet Rattan, Director (Organisation, Performance and Rewards) at Aon India, said.
About business outlook, 92 per cent of the firms surveyed expect their business improving or stabilising in 2020 while the rest 8 per cent felt there would be a decline in business.