New Delhi: Indian companies will offer 10% salary hike to their employees in 2017, the highest among all leading economies, Willis Towers Watson said in its salary projection report on Tuesday. Willis Towers Watson is a leading advisory, broking and business solutions company.
Compared to developed and key emerging markets in the region, India’s 2017 projected salary increases are the highest, followed by Indonesia at 9%, Sri Lanka at 8.9%, China at 7% and the Philippines at 6.4%. Salaries in developed markets such as the Australia and the US are projected to increase by 3% followed by the UK where employees income will grow by 2.9%, the report projected.
Among sectors, with a projected 11% hike in salary, the pharmaceutical sector continues to be the top paymaster followed by media (10.8%) and consumer durables sector (10.5%). The projected salary increase in the technology sector for 2017 is likely to be the same as the previous year at 10%, the same as the chemicals sector. In contrast, the financial services sector will offer the lowest salary hikes at 8.5%, a tad higher than 2016 when it offered 8.3% hike.
But going by the trend in the past two years, the actual salary hike in India has been less than projected and if that trend continues, then Indian workers will most likely earn an actual single digit salary growth in 2017. While in 2015 and 2016, the projected salary growth was 10.8%, the actual growth was 10.45% and 10%, respectively.
“If that pattern continues in 2017, Indian employees could see a single digit salary increase for the first time since 2011. The report also shows that once India’s average inflation of 5.7% is taken into account, the projected increase in real terms for 2017 will be 4.3%, down by a fraction from 4.4% in 2016,” the Willis Towers Watson report said.
The report said that with a tight salary budget, companies are becoming discerning about who they should reward. Just like the entire Asia Pacific region, in India, 38% of the budget for salary increases goes to the top performers. While 34% is shared by above-average performers, the remaining 28% of the budget goes to average performers.
“The data clearly shows a greater emphasis on rewarding high performers rather than across-the-board increases for all workers. Without such differentiation, companies will face pressure in attracting and retaining talent, especially for in-demand areas,” said Sambhav Rakyan, data services practice leader (Asia Pacific) at Willis Towers Watson.