While an inflated pay hike is not a given next year, 47% of the companies surveyed are likely to offer more than 8% hike compared to 44% in 2020
NEW DELHI :
Indian companies are expected to offer an average 7.3% pay hike in 2021, compared to 6.1% – lowest in 14 years— in 2020, said global human resource consultancy Aon in a survey released Wednesday.
The projected hike for 2021 shows resilience of the Indian companies and gives hope of better days ahead, following a tough period of economic slump. Aon’s survey collected data from 1,050 companies across 20 industries.
While an inflated pay hike is not a given next year, 47% of the companies are likely to offer more than 8% hike compared to 44% in 2020, the survey noted, adding that 14% companies are expected to offer zero pay hike in 2021 versus 29% this year.
As of September-October 2020, 87% of surveyed companies said that they intend to pay out salary hikes next year. About 61% of these companies plan to increase the compensation between 5% and 10%, the Aon survey said. In 2020, only 71% of companies offered a pay hike, of which only 46% had announced 5%-10% raise.
“Despite the gravity of the covid-19 pandemic in India and its deep impact on the economy, organizations in India have shown tremendous resilience and a mature view on talent," said Nitin Sethi, a partner at Aon, and CEO of the firm’s Performance and Rewards Solutions practice in India.
The survey said that industries looking to provide the highest salary increases are Hi-Tech, information technology (IT), IT Enabled Services (ITeS), life sciences, e-commerce, chemicals and professional services.
Meanwhile, companies in the hospitality, retail and real estate/infrastructure industries are expected to be laggards in 2021 when it comes to the salary hikes as some of these sectors were worst hit by the pandemic.
“Business and HR leaders made hard decisions in second and third quarters of 2020 and are now betting on the green shoots of improving consumer demand. They see the need to invest in talent as a critical part of their recovery and growth prospects," Sethi added.
Navneet Rattan, Director at Aon in India’s Performance and Rewards Solutions practice said the impact of Covid-19 has been “varied on different sectors and organizations. We see high differentials in salary increases – both intra and inter-industry. The difference between industries with highest increase to lowest increase hits 7.2% points as compared to mere 2.4% points in 2019".