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Salaries in India are projected to increase by 10 per cent in 2017, as per the 2016 Salary Budget Planning (Q3) report released by Willis Towers Watson. The projected rise in 2016 was 10.8 per cent but actual rise stood at 10 per cent. When compared to developed countries around the world, India’s projected rise also stands highest followed by Indonesia’s 9 per cent, Sri Lanka’s 8.9 per cent and China’s 7 per cent.
The report also said that if the actual salary rise is lower than projected rise this year too, it might fall to one-digit for the first time since 2011. The year 2014 was the last time when actual rise (10.6 %) was more than the projected rise (10 %). Salary increase projected in developed countries like US and UK stood close to 3 per cent.
However, in real terms – when average inflation rate of 5.7 per cent is deducted – projected rate will stand at 4.3 per cent in 2017.
“In India, 38% of the budget for salary increases goes to the top performers. Another 34% is shared by above average performers while the remaining 28% of the budget goes to average performers,” states the report.
“The data clearly shows a greater emphasis on rewarding high performers rather than across-the-board increases for all workers. Without such differentiation, companies will face pressure in attracting and retaining talent, especially for in-demand areas. Employers have to think beyond inflation-linking and look at more nuanced factors such as affordability, growth expectations, both employee and company performance, and specific talent and skills needs,” says Sambhav Rakyan, Data Services Practice leader, Asia Pacific at Willis Towers Watson.
Among the different sectors, a per report, pharmaceutical continues to project higher salary increase.
“Companies need to be transparent about communicating the rationale behind salary increases and performance benchmarking. In our experience, employees appreciate this,” added Rakyan talking about need to rethink alternative ways of rewarding employees for their work.