Amid the economic gloom, there is some good news for Indian professionals this year, with an expected salary growth of 9.2 per cent, the highest in Asia. The growth rate will, however, be slightly lower than the 10 per cent registered in 2019.
Though the ‘Korn Ferry Global Salary Forecast’ released last month pegs salary growth in India at 9.2 per cent in 2020, the inflation-adjusted real-wage in the country is anticipated to be constant at 5 per cent.
India has posted strong growth despite real wages taking a hit globally. Taking into account the government’s policy push, there is a sense of cautious optimism across sectors in that continue to show substantial salary increments, Navnit Singh, Chairman & Regional Managing Director, Korn Ferry India, said in the report. “We recommend organisations to re-examine their talent strategies and remuneration and reward policies, considering the rising cost of living, leading to a marginal real wage increase,” he added.
Uneven pay growth
Salaries in India continue to grow but not evenly. In line with slower and lower increments across the board, companies will continue to sharply differentiate their top performers and critical talent from the rest. Given the increasing cost pressures on businesses, fixed salaries will see tepid growth while high performers will continue to see a steady growth in total remuneration including performance incentives (short- and long-term), Singh said.
Indonesia is forecast to have a salary growth of 8.1 per cent, while Malaysia, China and Korea will see 5 per cent, 6 per cent and 4.1 per cent growth, respectively. The lowest salary growth is expected in Japan and Taiwan, at 2 per cent and 3.9 per cent, respectively, the report said.
Agreeing with the Korn Ferry forecast, Kamal Karanth, co-founder of specialist staffing company Xpheno, said India is a high GDP growth expectation market, and hence an investment magnet. That it boasts of the highest compensation growth among major Asian economies is one of the factors sustaining the momentum. Other factors, such as a talent edge (quality and quantity) and lower average age, will sustain the advantage for at least the next decade or so, he said. Companies enjoying good growth will end up averaging 8-10 per cent increments to sustain their edge.
According to Alok Kumar, Senior Director - Sales, Account Management & Global Accounts at HR firm ManpowerGroup India, India Inc is keen to retain talent. Compared to other APAC markets such as China, Malaysia, Singapore and the Philippines, where the salaries are expected to grow between 4 and 7 per cent, salary growth in India is estimated at 10 per cent, the highest in the region. Sectors such as e-commerce, fintech and services are going to witness around 12 per cent salary growth, he said, echoing the findings of the report.
Advantage IT sector
Interestingly, a Randstad Insights report released last month revealed that professionals from the IT industry command the highest salaries — the sector stands first in terms of average annual cost to company (CTC) paid at the junior (₹4.96 lakh) and senior (₹35.84 lakh) levels.
The renewed demand for professionals with key digital skills — cloud, product management, analytics, AI and automation — could be the major factor for the sector’s strong showing this year. With the demand for GST compliance specialists, accountants, management consultants and lawyers on the rise, the professional services sector ranked as the second highest paying sector for junior and senior levels, while topping the salaries for mid-level (₹15.3 lakh) professionals.
From a functional role standpoint, professionals in the strategy and consulting domain commanded the highest salaries for junior (₹6.90 lakh) and mid-level (₹15.32 lakh) roles. Digital marketers emerged as the highest paid senior professionals with an average annual CTC of ₹35.65 lakh, the report said.
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