BackPharma, mfg, telecom sectors see highest salary hikes for FY10
Pharma, mfg, telecom sectors see highest salary hikes for FY10
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New Delhi: Pharmaceuticals, manufacturing and telecom sectors are witnessing the highest increase of up to 11% in salaries for FY 2009-10, while IT and financial services got the least hikes.
With the economic downturn impacting the earnings of companies, they were restructuring their salary structures and focusing more on performance and also cutting down on the increments for the current fiscal, experts said.
As per a mid-year survey on ‘Performance & Reward Trends´ by Hewitt Associates, pharma sector saw the highest salary hike of 11.1% for FY 2009-10, followed by manufacturing (10.8%), telecom (9.5%) and FMCG (9.3%).
However, retail sector has been impacted by the downturn and the salary hikes for the current fiscal might not be as expected by the industry, Thiruvengadam said.
“Firms have been found to implement metrics to determine return on investment on human resources. Investment in proprietary knowledge and technological upgrade is continuing, albeit slower than during boom times.
“Smart firms have turned inward, consolidating operations, rationalising requirements and optimising resources to ride the slowdown," Deloitte senior director (Management Consultancy Services) P Thiruvengadam told the agency.
“In the wake of the economic downturn and the current situation that the Indian economy is witnessing the IT, ITeS sectors will be impacted," Thiruvengadam added.
The Hewitt survey revealed companies across industries were strongly differentiating rewards on basis of performance but majority of them were not considering any layoffs or severe salary cuts in the current fiscal.
The sectors to witness least increase in pay packages for the current fiscal are IT (2.8%), ITeS (4.4%) and financial services space (5.2%), the survey stated.
“In IT & ITeS sector, overall salary increases have been kept under control and most companies have reported a stable or marginally reduced pay cost structure in relation to total costs. It reflects the response of a growth economy managing a short to medium term slowdown, while keeping an eye on long term growth," Thiruvengadam added.
Interestingly, layoffs have been generally more prevalent in sectors which hired numbers in the last few years like in the IT, ITeS, and retail sector recently, he added.
The Deloitte survey ‘Engaging employees in recessionary times´ found that there was an overall decrease in attrition rates. Around 23% of firms surveyed reported attrition figures of less than 5% and 44% of companies reported figures between 5 and 10%.
“During these unprecedented times when firms across the world considered options such as mass layoffs and salary cuts, India Industry also considered same measures but with maturity," Hewitt’s Performance and Rewards Consulting practice leader in India Sandeep Chaudhary said.
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