Salary hike might go past its worst eight-year low in 2018, and as per HR consultancy firm Aon Hewitt, we may see brighter days ahead.
The upcoming appraisal season will see employees getting a projected average increment of 9.6 percent, up from 9.4 percent this year, according to initial findings of HR consultancy Aon Hewitt’s India Salary Increase Survey.
Professional services firms that were overloaded inundated with work during the transition to the GST rule; are expected to lead the way with the biggest pay hikes, projected at 10.7 percent. Life sciences and vehicle manufacturing may well see good hikes of 10.6 percent and 10.4 percent respectively.
Meanwhile, the much happening high-technology sector going through a dull phase is expecting an average hike of 9.9 percent in 2018 compared to an average of 9.7 percent in 2017, against the low market expectations.
Anandorup Ghosh, partner at Aon Hewitt said that it could be because IT product and IT consulting companies that fared much better, dispersed increments that made up for the low increments given by third party IT services players.
Ghosh added, “IT product and consulting organisations are showing a positive trend on the back of local demand. However, cost arbitrage business continues to be under pressure with shrinking overseas demand, current exchange rates and focus on lower segment of value chain.”
India has the highest inflation-adjusted salary increases in the world, even after giving hikes less than 10 percent for two consecutive years.
Sectors with lowest forecast of hike in 2018 include hospitality (8.9 percent), engineering design (8.8 percent), banking/finance (8.6 percent), and logistics service (8.6 percent).
The study reveals that maintaining competitiveness of pay continues to be a top reward challenge for firms, especially given that 71.9 percent companies reported salary increase budgets to be same as 2017.