India will see a 10% hike in salaries on an average in 2018, highest in the Asia Pacific region. Top performers and employees at startups and small MNCs are likely to get more.
India will see a 10% hike in salaries on an average in 2018, highest in the Asia Pacific region, a report has said, adding top performers and employees at startups and small MNCs are likely to get more hikes. However, salaries in India are seeing a decreasing pattern in the year-on-year salary increases and could hit single digit as well.
According to the 2017 Salary Budget Planning (Q3) report released by broking company Willis Towers Watson, salaries in India are projected to rise 10% in 2018, same as the actual increase in 2017 and 2016, yet will be highest in the Asia Pacific region. “India continues to show high salary increments compared to other countries in the Asia Pacific region. However, given the decreasing pattern in the year-on-year salary increases, Indian employees could very well see a single digit salary increase in 2018 for the first time since 2011,” Willis Towers Watson’s Sambhav Rakyan said.
According to the report, salary allocation for top performers in 2017 increased to 39% up from last year’s 38%. On the other hand, the budget set aside for average performance budgets decreased by 1% to 27%. India will be followed by Indonesia which is projected at 8.5%, China at 7%, The Philippines at 6%, and Hong Kong and Singapore both at 4%.
“These changes are marginal, but as salary budgets get tighter it still reflects the sentiment of employers to reward top performers. Therefore, now we see more companies relying on robust processes, governance and training at driving linkages between performance and pay. We expect this trend to gather greater momentum in the next couple of years as companies sharpen their pay for performance policies,” Arvind Usretay, Rewards Director of Willis Towers Watson India said.
While FMCG and retail sectors are going to give notable hikes — higher than average 10% — at 10.5%, the financial services are the only sector where the projected salary is less than the overall projection.
“Given the labour arbitrage advantage, segments such as back-office operations based out of India can be expected to offer above-average increases. Start-ups and smaller MNCs are also likely to offer above average salary increases to attract and retain critical skill employees,” Sambhav Rakyan said.
The 2016 Asia Pacific Salary Budget Planning Report is a bi-annual survey compiled by Willis Towers Watson’s Data Services Practice. The survey was conducted in July 2017. Around 4,000 responses were received from about 300 companies in Asia Pacific.