Amidst the ever-evolving landscape of India’s job market, where growth and competition go hand in hand, a recent report has unveiled encouraging developments for both employees and employers. According to the latest insights from WTW’s Salary Budget Planning Report, India’s projected median salary increment for 2024 stands out as the highest among all countries in the Asia-Pacific region. Although this is certainly intriguing, it’s worth noting that it falls just short of the actual median salary increase witnessed in 2023.
To put it into perspective, the projected median salary increase for India in 2024 is set at a robust 9.8%, remaining on par with the projection for 2023. This, however, is a slight decrease from the actual 10% salary increase observed in 2023.
India, as an emerging market, truly stands out within the Asia-Pacific (APAC) region due to its remarkable salary growth trajectory. In comparison, neighbouring Vietnam has a projected salary increment for 2024 at 8%, which coincides with the actual salary increase for 2023.
Moving to China, the projected salary increase for 2024 is 6%, slightly higher than the actual salary increase of 5.9% in 2023. The Philippines maintains an actual and projected salary increase of 5.7%. Meanwhile, both Malaysia and Thailand have their figures pegged at 5%. These figures underline India’s dominant position in the APAC job market, making it a hub for talent and economic opportunities.
Factors Influencing Salary Projections
While India’s salary surge is certainly noteworthy, it doesn’t come without its set of challenges. Tighter labour markets and the spectre of rising inflation have emerged as major concerns that influence salary increase budget changes for 2024. These factors have compelled businesses to reevaluate their financial strategies and compensation plans.
However, what’s truly remarkable is that despite these hurdles, more than half of the surveyed companies have chosen to increase their salary budgets in comparison to 2022. Even more striking, a quarter of these companies have adjusted their budgets upwards from their initial projections made in December 2022. This resilience and adaptability reflect the dynamism of India’s job market and the willingness of organizations to invest in their workforce.
Economic Prospects, Hiring Trends, and Attrition Rates
The Salary Budget Planning report also provides insights into India’s economic outlook and hiring patterns. Approximately 36% of companies have projected a positive business revenue outlook for the next 12 months in Q2 2023, compared to 42% in Q2 2022. This change in sentiment indicates the need for organizations to remain agile in the face of evolving economic conditions.
When it comes to hiring, almost 28% of companies are planning to recruit in the next 12 months. Notably, around 60% of companies have increased their headcount in 2023 compared to the previous year, reflecting a commitment to talent acquisition and expansion.
The report goes beyond mere statistics and forecasts; it also pinpoints the hottest job sectors for recruitment in the coming year. Information Technology (IT) takes the lead with a significant 61%, closely followed by Engineering at 59.8%. Sales (42.9%), Technical Skills Trade (38.6%), Finance (11.8%), Marketing (10.6%) and Human Resources (3.1%) also feature as sectors with potential employment opportunities. This diverse array of job sectors underscores the rich tapestry of India’s job market, offering a plethora of opportunities for job seekers across various industries.
Voluntary attrition rates in India have shown a positive trend, decreasing from 15.3% in 2022 to 14.6% in 2023, although it remains one of the highest in the APAC markets. This drop in attrition rates is indicative of a more stable job market.
Voluntary attrition rates, which refer to the percentage of employees who willingly leave their jobs in a given period, reveal a positive trend in India’s job market. The attrition rate in the country decreased from 15.3% in 2022 to 14.6% in 2023, indicating a notable improvement. However, it’s worth noting that even with this decrease, India’s attrition rates still rank among the highest in the Asia-Pacific region. This implies that India continues to experience a relatively high level of voluntary employee turnover compared to other countries in the region.
Sectoral Salary Trends in India
In 2024, specific sectors are expected to experience higher salary increases. Notably, the Technology, Media, and Gaming, Financial Services/BFSI, and Retail sectors are projected to offer the most substantial salary increments at 10%. This demonstrates these sectors’ ongoing demand for skilled talent and their commitment to providing competitive compensation to their workforce.
Furthermore, companies in the Financial Services and Retail sectors are projecting slightly higher increases for 2024 compared to the actual salary increments in 2023, underscoring the sustained demand for talent in these areas. Financial services/BFSI, in particular, has witnessed a dramatic rise in actual median salary increment, from 7.5% in 2021 to 9.8% in 2023.
On the other hand, the Technology, Media, and Gaming industry had a median budgeted salary increase of 9% in 2021, which remained constant at 10% in 2022 and 2023, with the same projection for 2024. This stability in salary increments may be largely attributed to the significant challenges faced by many IT companies over the past two years.
India’s IT industry experienced massive layoffs, primarily as a response to the economic recession, reduced venture capital investments, losses stemming from the COVID-19 pandemic, and other economic obstacles. To retain and attract talent in an environment marked by uncertainty, these companies have chosen to offer consistent and competitive salary increases. This approach not only bolsters job security but also serves as a vital tool for maintaining a skilled and motivated workforce, especially during these challenging times.
The Indian job market continues to be a fascinating realm of possibilities, a story of innovation, talent demand, and evolving dynamics. As we look ahead to 2024, India’s salary revolution promises to be a captivating chapter in the larger narrative of global workforce transformation.
