Rising attrition amid a tight labour market is likely to propel India Inc to shell out a 10 per cent salary hike to employees in 2023, up from 9.5 per cent in the previous year, a report by Global advisory, broking and solutions company Willis Towers Watson revealed. The Willis Towers Watson Salary Budget Planning report added that the hike that Indian companies are planning is the highest among the countries in the Asia Pacific Region (APAC). The report was based on a survey across 168 countries in April and May 2022, which includes 590 organisations in India.
Willis Towers Watson’s report showed that a total of 58 per cent of the employers in the country have budgeted for higher salary increases for the ongoing fiscal year compared to last year, while a quarter of them or 24.4 per cent to be precise made no change in the budget. The report showed that 5.4 per cent of employers have reduced their budget as compared to 2021-22.
The positive growth in expected salary hike is backed by a strong voluntary attrition rate in the country at 15.1 per cent, only second to Hong Kong. In other countries in the region, China is projected to see an increase of 6 per cent in salaries, Hong Kong at 4 per cent and Singapore at 4 per cent for next year. This makes India’s growth the highest in the Asia pacific region.
“Last year saw actual salary increments being higher than budgets and this was largely due to better-than-expected business performance and the need to retain talent. Despite the economic headwinds, higher projections for 2023 reflect cautious business optimism and a continued tight labour market,” WTW Consulting Leader India, Work and Rewards, Rajul Mathur said. The report showed that a massive 42 per cent of the companies in India project a positive business revenue outlook for the next 12 months, while only 7.2 per cent have projected a negative outlook. Further recruiters are looking for jobs in the IT sector the most, followed by engineering, sales, technically skilled trades, and finance.
Rajul Mathur highlighted that financial services, banking and technology, media and gaming sectors are expected to see the highest salary increase at 10.4 per cent, 10.2 per cent and 10 per cent. “We saw significant salary increases across sectors in 2022 and a similar trajectory is expected in 2023. With increased focus on technology-enabled growth, the demand for digital skills is driving pay increases for tech talent, especially in the technology, media and gaming, banking and financial services sectors,” Mathur added.