Salary hikes to cheer some sectors more

Rahul Shetty, a team leader in a non-voice BPO in Bangalore is likely to get a 15 per cent hike in his annual compensation this April. His wife Naina, who works in a private bank, may see a single digit percentage increment in her salary slip.

Different sectors would respond differently to the pay hikes, say experts, pointing out that companies are battling with factors such as rising inflation, margin pressures and the buoyancy of the employment market to arrive at a reasonable hike for their employees in April. But there's no doubt that organisations have their ears glued to the market.

“While the IT, ITeS and infrastructure sectors are likely to implement about a 15 per cent rise in their annual compensation, sectors such as retail and BFSI will be subdued,” says Ashok Reddy, Managing Director, TeamLease Services.

Some sectors will just about cover the inflation rate (11.5 per cent), says Balaji E, CEO, Ma Foi Consultants. A 9-14 per cent hike across the industry is what he predicts, with infrastructure at the upper end and IT and ITeS in the mid-range.

Mid-caps to dig deeper

Mid-cap companies would announce higher hikes than large companies to retain employees as a TCS or Infosys is hiring in large numbers, says Rishi Das, CEO, CareerNet Consulting. Last year, Infosys had announced a 13-17 per cent hike, while TCS had given its employees a raise of 10-13 per cent in 2010. While freshers' salaries in the engineering campuses have remained stagnant at last year's levels, early reports from B-school hiring indicate that students can expect a 15-20 per cent increase in average salaries.

“The buoyancy of the employment market has prompted salary increases to be higher this year than last year. While there's a desire to be cautious, the markets may force some aggressive steps,” says Dhananjay Bansod, Chief People Officer, Deloitte in India. He feels that the services sectors seem volatile as of now and these may witness higher increases as compared to brick-and-mortar.

Praveen Bhadada, Manager, Consulting, Zinnov Management Consulting Pvt Ltd, a globalisation advisory firm, says that it would be difficult to put a figure to the hikes expected, but there is pent-up demand as the mid-caps have not seen any hikes for about 24 months and with a buoyant job market, employees are shopping for offers and bargaining hard with their employers. There have been instances where employees switching jobs have demanded and got hikes of between 50 and 100 per cent, he points out. “Such instances have disrupted the trend. Therefore, increments depend on the organisation, the employee's position in the experience pyramid and the criticality of the job,” he says.

On the increments expected at different levels, Mr Bansod says the pressure at the bottom of the pyramid would impact increments at the higher levels too. “A growing economy impacts the mid- as well as senior management. The organisations will have to balance the distribution of ratings and increments at the mid- and senior levels to match the overall budgets,” he points out.

Temporary staff

As the attrition dragon raises its head again, companies are also considering revising the salaries of their temporary employees. A TeamLease temporary salary primer released recently indicates that salary hikes are now spread over a larger set of profiles across industries and cities. The study attributes this to the rush and need for skills and the right talent. The battle for talent has pushed the median salary increment to 7.3 per cent, up from 5.25 per cent in 2009, according to the study, and the cheer is only going to spread wider over the next couple of quarters.

Automobile, FMCG, food and hospitality, ITeS and retail lead the charge in the pay-for-skills department, while agriculture/ agrochemicals, consumer durables and healthcare have improved their ability to identify, assess and reward skilled talent.

Sangeeta Lala, Vice-President, TeamLease Services, speaking on permanent-temp salary convergence says, “The current 90 million temp workforce in India is only the tip of the iceberg as salaries converge between temp and perm jobs. The industry plays a vital role as a portal for the unorganised sector workers to enter the organised sector and a vehicle that allows employers to take potential employees for a test drive.”

COMMENT NOW