India To Witness Double Digit Salary Growth
India to see a 10 percent salary increase in 2019, which is the highest in Asia-Pacific, according to the Willis Towers Watson Survey
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Salaries in India are projected to rise 10 percent in 2019, same as the actual increase in 2018, according to the latest Q3 2018 Salary Budget Planning Report released by Willis Towers Watson.
While salary increases in India are stabilising around the 10 percent mark, they remain the highest in the Asia Pacific region. Indonesia is projected at 8.3 percent, China at 6.9 percent, The Philippines at 6 percent, and Hong Kong and Singapore both at 4 percent.
About 42.6 percent of the total salary increment budget is being allocated to the top or above average performers. On average, 17 percent of the salary increase budget is being allocated to top performers, which represent 13.1 percent of employees in India. This implies that for each $1 allocated to an average or below-average performer, $1.31 is allocated to a top performer.
The report identifies Technical Skilled Trade (48 percent), Engineering (45 percent), IT (39 percent) and Marketing (15 percent) as the top four areas for recruiting critical functions in the next 12 months.
Salary increases by management level
Median salary increase for 2019 at Executive level is projected at 9.8 percent, a marginal increase from 9.7 percent in the previous year, and at 10 percent for mid-management and production / manual labour, a drop from 10.1 percent.
The Pharmaceuticals sector has the highest projected salary increase for 2019 at 10.3 percent. The salaries for consumer products and retail sector will remain consistent at 10 percent owing to the green shoots of recovery in the sector’s performance, increasing consumer confidence and purchasing power. Notably, the financial services sector, mainly comprising Banks, NBFCs and Insurance companies, has seen a steady increase from 9.1 percent in 2017 to 9.6 percent for 2019, largely due to improved performance, higher premium collections for insurance companies and regulatory reforms.
Greater focus needed on pay equity, transparency and flexibility
The recent “Getting Compensation Right” study found that well over half the surveyed employers in India (68 percent) are using their base pay programmes to differentiate pay and to drive higher individual performance. However, 52 percent of employers said that their pay strategies were limited by how much they can afford.