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Salaries are projected to see a median salary increase of 9.3 per cent next year compared to the actual median salary increase of 8 per cent in 2021, according to the ‘Salary Budget Planning Report’ by global advisory, broking and solutions company Willis Towers Watson.
India’s projected salary increase is the highest in Asia-Pacific for the next year as optimism returns over improved business outlook in the next 12 months, the report added.
The Salary Budget Planning Report is a bi-annual survey conducted online between May and June 2021, with 1,405 companies across sections of industries from 13 markets in Asia-Pacific, including 435 companies in India.
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This translates into increased hiring across businesses with 30 per cent of companies planning to hire in the next 12 months, the report said adding that this is almost three times more than 2020.
The report also showed that a large part of hiring across sectors is likely to happen within critical functions such as engineering (57.5 per cent), information technology (53.4 per cent), technically skilled trades (34.2 per cent), sales (37 per cent) and finance (11.6 per cent), and these jobs will command a high salary.
In addition, attrition rates in India, both voluntary and involuntary, have been lower compared to other countries in the region, the report stated.
The voluntary attrition rate was 8.9 per cent and involuntary attrition rate was 3.3 per cent, it added.
”Increased business optimism is clearly translating into higher salary budgets and increased hiring activity. The pandemic was a watershed moment in the way organisations plan their people spend,” Willis Towers Watson Consulting Leader India, Talent and Rewards, Rajul Mathur said.
He added that while talent attraction and retention remain a challenge, the core employee value proposition will now need to go beyond just competitive salaries and increasingly focus on a wider range of benefits, wellness, upskilling and the overall employee experience.
”This trend is likely to reshape the people spend and total rewards philosophy in India going forward,” Mathur added.
Meanwhile, the report showed that the high-tech sector is expected to see the highest salary increase at 9.9 per cent in 2022, followed by the consumer products and retail sector at 9.5 per cent and manufacturing at 9.30 per cent.
In terms of proportionate increase over last year, the high-tech sector again tops with a projection of almost 1.9 per cent increase from 2021, it stated.
”COVID-19 accelerated the digitalisation process across industries including automation and artificial intelligence. These developments, along with the high-tech sector’s early adoption of the remote working model, have positively impacted the sector’s salary projections.
”The manufacturing and retail sectors saw rising demand driven by the easing of COVID-19 restrictions and a positive outlook of order inflows and consumer sentiment,” he said.
On the other hand, the energy sector received among the lowest actual salary increase in 2021 at 7.7 per cent, the report said.
The projected salary of the energy sector in 2022 is also the lowest at 7.9 per cent, according to the report.
Mathur said a combination of the prevailing macroeconomic environment, typical business cycle and the lingering business impact from the pandemic have adversely affected the energy sector the most.
”That said, the salary increments for the renewable sector can be expected to be comparatively higher as India moves towards clean energy,” he added.