The Hindu Business Line : `Salaried Indians get up to 14.3 pc hike'

INDIANS working in multinational companies, joint ventures and locally-owned companies have received salary hikes of up to 14.3 per cent between July 2004 and January this year.

As usual, employees working for IT companies were the biggest beneficiaries with an increase in salaries of about 15 per cent during this period, according to a survey by Hewitt Associates.

According to the Ninth Annual Salary Increase survey by Hewitt, the outlook for 2005 is brighter with employers expressing confidence in the growth of the economy and expecting better performance from their organisations.

"Due to a large region-wide economic upswing and the global attention attracted by India, employers are reporting a more positive outlook on the salary increase across industries in 2004," Mr Nishchae Suri, Business Consulting Leader at Hewitt Associates Asia Pacific, told reporters here.

He said the IT sector awarded the highest average salary increase at 14.9 per cent, followed closely by the entertainment/communication/ publication sector at 14.7 per cent. The latter has also been projected to provide the best pay-cheques at 15.4 per cent in 2005, Mr Suri said.

The survey covered 573 organisations and analysed information on more than 7,00,000 employees.

Industries with the lowest salary increases in 2004 were those that were not-for-profit at 9.1 per cent, banking at 9.3 per cent and chemical/petrochemicals at 9.5 per cent, he said.

Attrition on the rise: But while salaries have been increasing, attrition rates were also high. In 2004, attrition climbed to 14.5 per cent from 13.2 per cent in the previous year.

Professional/supervisor and technical cadres recorded the highest level of attrition at 14.6 per cent last year, due to higher demand for the limited talent pool in the country.

Mr Suri said, "Managing young, competent knowledge workers with high aspirations is becoming a huge challenge. Investing in their development and showing them a clear growth path has become imperative, and organisations are continuously looking for innovative ways to retain and engage such a workforce."

He said the Hewitt survey also concluded that Indian salaried people were better off than their Asian counterparts. Unlike the trend in 2000, when senior management received the highest increment, pay packets have been getting fatter for the professional/supervisor and technical cadre too for the last five years, said Mr Suri, adding that this would continue in 2005 as well.

The salary for senior and top management increased by 12.2 per cent in 2004 and by 14.3 per cent for professional/supervisor/technical staff, according to the survey.

Salary for the clerical support staff increased by 12.1 per cent, while the manual group stood last in the list with a 9.7 per cent increase during the year.

The Hewitt study also highlighted that the use of variable pay as a strategic lever continues to be an important means of attracting and retaining talent, as 85 per cent of respondents reported having a variable pay plan in 2004.

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