India loses Asia Pacific pay hike top spot to Sri Lanka

India has lost its top rank to Sri Lanka as the nation with the highest salary hike to executives in the Asia-Pacific region during 2007, a new study by global HR firm Hewitt Associates said on Wednesday. “Sri Lanka has overtaken India by reporting the highest average salary increase at 15.3 per cent while India reported 14.8 per cent rise,” Hewitt Associates said in its annual Asia-Pacific Salary survey.

This was largely due to continued economic growth despite high energy prices, civil conflict and high inflationary pressures in Sri Lanka, the survey said. India was ranked at the top in last year’s survey with a salary hike of 14.4 per cent. In this year’s survey, Vietnam was ranked third with a hike of 10.3 per cent, followed by China (8.6 per cent) and Philippines (8.2 per cent). Hewitt said none of the participating Indian companies reported a salary freeze for 2007, nor did any expect a freeze for 2008. Junior management, supervisors and professional-level employees got the highest average hike of 16 per cent and expect the highest raise of 15.6 per cent next year.

The average overall salary increase budget in India ranged from 11.7 per cent to 16 per cent for 2007, while it is expected at 11.7 per cent to 15.6 per cent for 2008. About one-fourth of the companies said they offered fixed bonuses to their employees this year. Stock options emerged the most popular form of long-term incentive among the employees in Indian companies, it noted. The survey said that hefty salary packages are not enough to attract, motivate and retain employees. Packaging the fixed salary correctly with a variable component is the need of the day, it said.