Hay Group salary report reinforces a 10.3% hike for Indian companies
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Bengaluru: Human resource advisory firm Hay Group, a division of the executive search company Korn Ferry, has predicted an average pay hike of 10.3% this year for Indian employees, matching a forecast by Aon Hewitt last week.
Hay Group’s latest salary report, based on a survey of 461 companies, said the expected increase for middle level and clerical and operations level executives is likely to remain the same as last year at 10.5% and 10%, respectively, while the percentages for senior level executives are expected to be down by about 0.2-0.3 percentage points.
The forecast average salary increase is a slight decrease from the average 10.4 % raise offered by Indian companies in 2015.
Sectorally, technology is the only sector where the increment is expected to be higher by a percentage point at 11.2%, when compared to last year. The biggest decline is expected to be in the auto sector from 10.9% in 2015 to 10.1% this year.
In terms of the factors that drive salary increments, individual performance and merit is at the top, followed by market competitiveness, said the report.
Even though there is hardly any change in increment percentage in the last 4-5 years, what’s changing is the play within that overall percentage, says Amer Haleem, country manager, productized services, Hay Group.
“Companies are now making a sharp differentiation between high, average and low performers. The increment grids have a broader range spread, which directly brings the focus on the differentiation in rewards, for different levels of performance,” he said.
Variable pay plans for many organizations have also been modified to lay emphasis on organization performance.
Retail and oil and gas companies rolled out the highest annual short term variable pay in 2015 (14.1% and 13.9%, respectively). The high pay outs in the retail sector reflect the huge incentives being paid out in the e-commerce sector to attract and retain the talent, said Haleem.
Interestingly, while the technology sector topped the charts in salary increments, the variable payouts in the sector were amongst the lowest at an average of 10.2%.