With headline inflation showing an upward trend and touching a 13-year-high of 11%, this piece of news may not instill a feel-good-factor among employees across sectors. The average salary increments in the country this year, against last year, are in the range of 10%-15% across industry, according to the Salary Handbook 2008-09. The salary hikes in 2008 are relatively lower than the increments reported over the last few years, indicating a consolidation across sectors. The salary handbook indicates that the range of salary offered for the various positions across industries has widened, a trend that can be attributed to a greater emphasis on pay for performance. Also, apart from the standard annual increments on base salaries for all employees, across levels and functions, organisations are more open to rewarding their key performers and talent with rare and sought after skill sets and experience.
The Kelly survey analyses the salary range in sectors such as sales & marketing, IT, ITeS, HR, office support, banking and financial services and engineering amongst others and finds that even non-sales related functions in the banking and financial services and IT, ITeS sectors have a much wider salary range as compared to previous years.
?Higher absorbing capacity in employment will continue in sectors like insurance, financial services, healthcare, retail, hospitality and real estate as well as in the growing and diversifying Service sector. We expect an increased demand for talent with relevant industry work experience and also with specialized skills across functional verticals of marketing and business development, engineering, finance, IT software, research and medicine?, said Rajiv Mehrotra, country general manager, Kelly Services India.
Yearly increments and salary increases are no longer inflation, function or industry dependant. Although the first wave of the slowdown in the US economy is being felt in single-digit salary increments in the IT and ITeS industry, specialised skills in the IT industry is expected to be in demand and organisations are willing to pay higher salaries to attract talent and above average increments to retain them, observes the report.
Commenting on the emerging compensation trends in Mehrotra said, ?We also observe that base salaries are stagnating and showing marginal increases whereas variable pay is being used as the key differentiator to retain talent.? The survey notes that performance linked salary components are coming in play and vanilla incentives covering a group or level of employees is giving way to more employee specific profit or productivity linked incentives. Sign-on bonus for senior level hires and anniversary increments to reward longer tenure are all being used by organizations to attract and retain talent, while keeping the overall salary cost low.
