Fatter paycheques: Corp salaries projected to rise 10.6 in 2010

A study conducted by Hewitt Associates,a corporate consultancy on human resources,projects an average of...

A study conducted by Hewitt Associates,a corporate consultancy on human resources HR,projects an average of 10.6 per cent increment in Indian corporate salaries for 2010,as opposed to the actual increase of 6.6 per cent in 2009. Surveying more than 465 companies across Asia Pacific,salary revision for India is expected to top the charts. The report claimed that Indian owned firms,with a projected increase of 11.4 per cent,will surpass MNCs,which should anticipate a boost of 10.2 per cent.

Hard hit by the global financial crisis,domestic firms had undergone severe salary cuts,freezes and layoffs in 2009. With an aggregate salary attrition of 15.4 per cent last year,the junior management,professionals and supervisor cadre was the worst hit of all. This group of employees,however,is expected to bounce back with an increment of 10.9 per cent,little ahead of the top executive group,which should anticipate a 9.6 per cent hike,senior management 10.1 per cent,middle management 10.6 per cent and 10.4 per cent for officer cadre.

Among different sectors,IT,which stood at a meagre 2.9 per cent increase,is expected to jump up to 8.9 per cent increment rate. Retail sector should rise from 4.1 to 11.1 per cent,banking/finance and insurance from 5.1 to 10.5 per cent,and engineering,procurement and construction industry should look at an increase of 12.6 per cent in contrast to 6.9 per cent of 2009.

Although in line with the growth trend of the Indian economy,scepticism remains over accepting these figures at face value. Hewitt had projected an average increase of 13.9 per cent in salaries for 2009 in March 2008,revised it to 8.2 per cent looking at the grim economic situation in March 2009,whereas the actual turned out at 6.6 per cent. Moreover,estimates and actual figures for IT and retail including wholesale and distribution sectors,the most crucial contributors to the economy and worst hit during the crisis,had solid differentials of 2.8 per cent and 1.2 per cent respectively.

Commenting upon the poor performance of the IT sector,Sandeep Chaudhary,leader of Hewitt8217;s Performance and Rewards Consulting practice in India,said There were major salary cuts and layoffs in the IT sector during the crisis.

As far the projected hike of 10.5 per cent for banking and insurance sector is concerned,it remains unclear how this estimate has been reached knowing that salary revision for all groups of employees of the biggest insurance firm,Life Insurance Corporation of India LIC and all public sector banks is still awaiting implementation due on August 1,2007 for LIC employees.

Interestingly,the study,which earlier had specific classifications for sectors such as pharmaceuticals,energy,and telecom,clubbed all these sectors into a single category Engineering,Procurement and Construction,further increasing ambiguity.

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Although in its conclusion it provides a collective estimate for all these sectors,actual estimates for the same have not been provided. To top it all,statistical methods applied to reach these estimates have not been provided either.