Employers are expected to go for a 10 per cent salary hike in 2014, according to a new survey. This increase is the lowest India has seen in a decade, except for financial year 2009 when the economy was unstable post the global financial crisis.
The survey conducted by Aon Hewitt, human resources solutions business of Aon, said that this increase is marginally higher than the projections made in September 2013.
There is reason for cheer for those employed in sectors such as pharmaceutical, chemicals, engineering services and consumer goods. They can expect hikes between 10 per cent and 12 per cent. These sectors are largely dependent on domestic economy, with salary costs forming a small percentage of the total cost structure.
However, those in hospitality, retail, and financial services sectors, where salary costs are a significant component of total cost structure, may get less than 10 per cent hike.
The survey added that about 69 per cent of industries have reduced the salary increase budget for 2014 compared with the actual increases paid out in 2013.
Companies are also not hesitating to differentiate sharply on the basis of performance as top performers are projected to get an average 15.3 per cent increase in 2014, which is almost 1.5 times the average increment provided to employees meeting expectations.
Anandorup Ghose, Rewards Consulting Practice Leader at Aon Hewitt India, said, “Fundamentally, this is the most distinctive change in the approach towards pay management. With shrinking pay budgets, companies are providing higher pay increase budgets to better performers.”
Aon Hewitt conducted the survey across 565 firms and data was collected during the period of December 2013-Januray 2014.