After a year-long period of pay cuts and layoffs fuelled by the COVID-19 pandemic, employees in India are finally going to catch a much-needed break in 2021!.
A new salary projection survey revealed best performers are highly likely to see a median 20.6% increment in the upcoming appraisal season while the average salary hike for employees in India is projected to 6.4% this year.
Conducted by Willis Towers Watson, a global consulting and advisory firm, the Salary Budget Planning survey was conducted online during October-November 2020 period.
It received over 18,000 sets of responses from more than 130 countries worldwide and highlights several important aspects of employment in India Inc. The trends on salary hike in India in the post-pandemic year is quite satisfying, if not overwhelming.
Let’s find out what they are!
Sectors Offering Higher Salary Hikes In India
According to the report, high-tech, pharmaceuticals along with consumer products and retail are projected to offer a median salary increase of close to 8% which is more than the general pegged industry projection.
The financial services and manufacturing sector grabs the second place in the list of salary hikes in India by sector as they are projected to offer a 7% pay hike, followed by ^% salary hike employees working in the BPO sector are projected to receive. The survey found that the lowest pay hike in India is being expected in the energy sector where the average salary hike is expected to touch 4.6%.
The report also highlights that even though the business environment and sentiment have improved post-pandemic, it might not concretely translate into Indian companies recruiting more individuals in 2021.
Pay For Performance To Increase In India Inc.
Rajul Mathur, Consulting Head Talent & Rewards from Willis Towers Watson India mentioned that with compensation budgets which are definitely lower than previous years – all thanks to the pandemic, Indian companies are now most likely to prioritize allocating it towards protecting more able and skilled talent.
Mathur also mentioned how one can expect a greater emphasis to be put on pay for performance or pay linked to business output thus signaling companies are looking to aggressively optimize for efficiency and effectiveness throughout their workforce.
2021 vs 2020: Decrease In Average Pay Hike India
The survey also notes that the median salary increase at the executive level which is projected at 7% for 2021 is marginally lower than 2020 which recorded 7.1% hike in salary.
The same goes for middle management including professional and support staff as well. In 2021, the average pay hike for these categories is being pegged to be at 7.3% while in 2020 it was 7.5%.
Asia Pacific Markets: A Comparison
The Salary Budget Planning report reveals a comparison of projected salary hikes across the key Asia Pacific markets in 2021 as well. In comparison, the projected salary hike in India during 2021 appears quite satisfying. The median salary increase in Indonesia is projected at 6.5%, while China is at 6%. This is followed by the Philippines, Singapore, and Hong Kong with 5%, 3.5%, and 3%, respectively.
Lastly, out of all the surveyed companies in India, only 37% have projected a positive revenue outlook going forward in the next 12 months.
However, that being said, as mentioned earlier, recruitment is yet to show any drastic improvements as only 10% of Indian organizations who took part in the study reported plans of adding new headcount compared to 14% in the last quarter.