Real estate sector witnessed the highest salary growth followed by the energy sector in 2007, according to India specific salary increase survey conducted by Hewitt Associates, a human resources services firm. Hewitt Associates, which surveyed nearly 600 foreign-owned, locally-owned and joint venture companies found that employees in India have received an average salary increase of 15.1% in 2007, up from 14.4% in 2006. The report also predicts an increase of 15.2% in 2008, making this the fifth consecutive year that salaries have demonstrated double-digit growth in India. However, from there onwards the report forecasts a gradual decrease in salary increases and a stabilization of increases to a range of 9 to 10% by 2012. In the late 1990s, senior and top management enjoyed the highest salary increases across all surveyed employee groups. But the trend has reversed since 2000 and staff members at the junior manager/ professional/ supervisor levels have been receiving the highest increase, a trend that has maintained itself this year, observes the survey. At middle management level also the pay packages saw a decent hike.
The report further observes that the attrition rates have reached an all time high with the insurance industry (35%) topping the chart, followed by ITeS (28.9%) and?the hospitality industry (27.1%). ?In order to retain employees, organizations must architect a compelling employer value proposition.?They have to reduce their current reliance on total cash and move to a total rewards experience, where the focus is on relational rewards,? says Sandeep Chaudhary, leader ,Hewitt?s rewards consulting practice in India.
The study also highlights that the use of variable pay continues to be an important means of attracting and retaining talent with 95% of respondents saying they have variable pay plans in 2007. According to the study, the actual variable spending as a percentage of payroll was highest for top executives and senior management at 25% in 2007.