Home / Companies / News /  Salaries in India expected to rise 10% in 2020: Willis Tower Watson report

Mumbai: Salaries in India are projected to rise 10% in 2020, a marginal increase from this year, while recruitments may slow down as companies adopt a cautious business outlook, said a report by Willis Tower Watson, a global human resource consultancy firm.

Salaries in India increased 9.9% in 2019, according to the third quarter 2019 Salary Budget Planning Report published by Willis Towers Watson.

While salary hikes in India stabilise around the 10% mark, they remain the highest in the Asia Pacific region. Indonesia is projected at 8%, China at 6.5%, Philippines at 6%, Hong Kong and Singapore both at 4%, as per the survey.

The survey was conducted in July across 1,128 companies in 20 markets in Asia Pacific, including 337 from India.

“Though salary increases in India still continue to be among the highest in the region, companies are taking a cautious approach and do not intend to make any significant changes from previous years, " said Rajul Mathur, consulting leader – (talent and rewards), Willis Towers Watson India.

According to him, companies are beginning to make selective skill-based compensation adjustments to cater to requirements around automation and digitisation.

The report also pointed out that recruitment efforts are expected to slow down due to a cautious business outlook..

Only 22% of organisations in India plan to add new headcount compared to 29% last year, the survey showed. Organisations planning to maintain their current headcount increased to 70% in 2019 from 63% in 2018, while 7% plan to reduce headcount compared to 8% last year, it said.

While hiring has been stable in sectors like high tech, shared service outsourcing, pharmaceuticals, energy and retail, recruitments have slowed down significantly for automobile, auto ancillary and engineering.

As per the report, median salary at the executive level is expected to rise 10.1% against 9.6% in 2019. For middle management, professional and support staff, the report projects a 10.4% rise in 2020 from 10.1 % in 2019.

The survey also found a continued shift towards variable pay, especially at senior management levels. Actual variable pay at executive level increased to 30.7% in 2019 from 20.7% in the previous year.

"Attracting and retaining the right talent at leadership positions is commanding higher pay increases as the leadership pool continues to be limited. The increase is mostly in terms of variable pay as there is greater focus on pay for performance," Arvind Usretay, director, rewards, Willis Towers Watson India.

That said, companies are also working towards more robust succession planning programmes to develop a sustainable leadership pipeline, he added.

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