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India Inc is projected to give an average salary hike of 7.7 per cent in 2021, according to a survey by global professional services firm Aon.
Eighty-eight per cent of the companies surveyed said they intend to hike salaries of their employees, according to the survey that analysed data across 1,200 companies from more than 22 industries
Despite a tough 2020 with stringent lockdowns, India continues to project the highest salary increases among the BRIC nations, Aon said in its 25th edition of the annual salary survey.
E-commerce, IT, ITeS , FMCG and Life Sciences are among the sectors that are likely to see the highest projected salary increase. Meanwhile, hard-hit industries such as hospitality, restaurants, real estate and infrastructure and engineering services are that are projected to see lowest salary increases.
At the same time, implementation of the new Labour Codes could make companies review their compensation budgets in the second half of the year.
Nitin Sethi, Partner and CEO of Aon’s performance and rewards business in India, commented, “We expect the increment dynamics for 2021 to play out over a longer period of time given the uncertainty and potential impact of forthcoming changes. The proposed definition of wages under the new Labor Codes could lead to additional compensation budgeting in the form of higher provisioning for benefit plans like Gratuity, Leave Encashment and Provident Fund.”
“It is also possible that some of the salary increments may not translate into higher cash-in-hand for employees if organisations choose to pay higher provident fund contributions on the new definition of wage,” he added.
Roopank Chaudhary, partner in Aon’s human capital business in India, added, “It’s notable that the sectors that were adversely impacted by Covid-19, such as retail, hospitality and real estate, are projecting healthy increases in the range of 5-6 per cent. Such numbers reflect their intent to stay relevant and to control attrition, which had increased for these industries last year.”
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