According to global professional services firm Aon’s ‘Salary Increase Survey in India’, the increase is a sign of strong economic recovery and improved consumer sentiment.
India Inc employees can look forward to better pay cheques next year as there is a projection of an average 9.4% salary increase in 2022, up from the 8.8% increase rolled out in 2021 and 6.1% in 2020.
According to global professional services firm Aon’s ‘Salary Increase Survey in India’, the increase is a sign of strong economic recovery and improved consumer sentiment. The projected levels for 2022 bring back the salary increases to what was seen in the pre-pandemic years between 2017 and 2019. The survey analysed data from over 1,300 companies in 39 industries.
The number of companies offering zero increments is expected to decrease from 2.5% in 2021 to 1.1% in 2022. The better news is that more companies will be looking at giving increments in higher ranges. For instance, the percentage of companies looking to give increments in the range of 8-10% is expected to go up from 36.9% in 2021 to 43% in 2022. Also, the percentage of companies giving a raise of over 10% will be up from 20.4% to 24.7%.
Nitin Sethi, partner and CEO of Aon’s performance and rewards businesses in India, said, “While 2021 is a year where certain sectors remain under stress due to the Covid-19 pandemic, most businesses have an optimistic view going into 2022 and are projecting higher salary increases. We see positive sentiment across most sectors, high investor confidence with sustained foreign direct investment flowing into the country and growing consumer demand across most segments.”
The top three sectors with the highest salary increase projected for 2022 for India are technology, e-commerce and IT-enabled services with 11.2%, 10.6% and 9.6% increases, respectively. The real estate and infrastructure sector will see significant improvement in salary increases, with a rise of 8.8% projected in 2022. Sectors with the lowest salary increase projected for 2022 are hospitality, engineering services and energy.
Roopank Chaudhary, partner and chief commercial officer, Aon, said a huge divide had crept into the salary increase numbers across sectors in 2020, as some sectors were looking at an increase of 7-8%, while others more severely hit by the pandemic were looking to give a 2-3% raise. “That great divide has somewhat diminished in 2021-22. There is a convergence of more sectors to come closer towards the India average of 8.8% for this year and 9.4% for next year. Many of the sectors have recovered and there is buoyancy in majority of the sectors. As a result there is a strong convergence towards a central point. It is between a 10% and 7% as compared to a 9% and 1-2% as was the case last year,” he said.
The survey highlighted that average variable payouts as a percentage of the fixed pay decreased in 2021 to 11.8% versus 13.2% last year. Also, the overall attrition stood at 20% and voluntary attrition at 15.4%, which highlights a renewed war for talent.