Employees in India can expect an average salary increase of up to 10% in 2023, up from an actual increase of 9.8% in 2022, says WTW’s latest Salary Budget Planning survey conducted in Q4 2022. The survey of over 700 companies in India found that salary increases in the country continue to be the highest in the region. Unlike markets in the West, there appears to be a limited impact of inflation on salary budgets in India, which have historically been higher than CPI-based inflation. Rajul Mathur, consulting leader, work and rewards, WTW India, says, “Business opportunity and employee retention are currently the primary driver for salary increases in India.”
According to the survey findings, fewer companies projected a positive business revenue outlook for the next 12 months (36%) in Q4 2022 compared to 52% in Q4 2021. However, close to 80% of organisations feel that they have similar or higher business revenue outlook for the next 12 months, implying that overall business confidence remains high.
“As the post-pandemic business strategies in several sectors firm up, workforce recalibrations are also taking place. Layoffs are reflective of this recalibration but that does not imply a change in the general positive business outlook,” says Mathur.
The report looks at a range of job grades across various sectors and reviews practices to help companies “with their compensation planning for 2023 and beyond”.
Across most industries, the salary increase projection for 2023 shows an upward trend. Financial services, tech media and gaming, pharmaceuticals & biotechnology, chemicals and retail sectors are expected to see the highest salary increases at 10%. On the other hand, salary increases in manufacturing – durable goods (9.5%), non-durable goods (9%) and business process outsourcing (9.8%) sectors are expected to be below the industry median.
Salary increases across markets in Asia Pacific (APAC) continue to rise and are expected to be equal as last year or higher in 2023. China is projected to see an increase of 6%, Vietnam 8%, Indonesia 7%, Hong Kong 4% and Singapore at 4% this year, as per the report.
India’s overall voluntary attrition rate in 2022 remained high across sectors like technology, shared services and outsourcing and financial services compared to 2020. “With a projected attrition rate as high as 24% for key talent segments, organisations need to look beyond pay increases and consider adjustments in their benefits, employee experience strategy, career paths, as well as work and stress management support they provide to their employees,” Mathur adds.