Salaries in India are expected to increase by 10.3 per cent in 2023, highest among major world economies and Asian peers, according to Aon plc.
In 2022, salaries in India witnessed an actual increase of 10.6 per cent in 2022.
As per Aon plc’s 28th Annual Salary Increase Survey in India, double-digit salary growth will continue in India despite economic volatility, largely as a response to high attrition rates.
At 21.4 per cent, the attrition rate in India for 2022 remained high – a consequence of an ever-changing talent strategy and the ongoing gap between supply and demand of talent.
“With back-to-back double-digit increments, India Inc continues to be bullish on talent despite fears of global macro-economic uncertainty.
“Organisations are increasingly prioritizing their spends towards top performances, key talent and high potential talent,” said Pritish Gandhi, Aon Director & India Practice Leader, Executive Compensation & Governance.
The study, that analyzed data across 1,400 companies from more than 40 industries noted that India continues to have the highest salary increases in the region and among major world economies.
Among other economies, Brazil is also seeing a healthy increase of 7.2 per cent, Indonesia 6.7 per cent, China 6.3 per cent, Philippines 5.9 per cent, Malaysia 5.2 per cent and Singapore 4.8 per cent.
According to the leading global professional services firm strong business growth has led to higher proportion of population being assessed in higher tiers of performance “Increments of top-performances are approximately four-times the increment of bottom performances (in companies which have given increments to both categories). Interestingly, almost 8 in 10 companies give 0 increment to bottom performances,” Gandhi said.
Globally connected industries, such as Technology Platform and Products, are somewhat cautious in their salary budgets while industries driven by domestic demand, such as Manufacturing or FMCG/FMCD, are bullish on their budget planning as compared to their five-year averages, said Roopank Chaudhary, partner, Human Capital Solutions, India at Aon.
E-commerce firms will be offering the highest hikes at 12.2 per cent in 2023, followed by professional services firms who are slated to give a 11.2 per cent increase, the survey said.
Life sciences and retail companies will be among those which will be giving out lowest salary hikes at 9.7 per cent, the survey said.
Chaudhary further added that forward-looking organizations are therefore contextualizing salary increase planning with data-driven analysis and the unique circumstances of their own industry and organization to maintain their workforce resilience and make more-informed decisions.
Organisations remain upbeat on Hiring and Salary increases, anchored in robust growth sentiment.
“Business sentiment is bullish on growth, hiring and salary. Though there is growth moderation expected in the next financial year, India-focused organisations continue to plan for long-term growth, whereas global organisations continue to invest in India as the talent factory.”