Salaries in India are projected to rise 10% in 2020, marginallyhigher than the actual increase (9.9%) in 2019, according to the latest Q3 2019 Salary Budget Planning Report released by Willis Towers Watson, the global advisory, broking and solutions company. The report looks at a range of job grades across various industry sectors and is designed to provide companies with guidance for their annual salary forecasting for the year ahead.
While salary increases in India are stabilising around the 10% mark, they remain the highest in the Asia Pacific region.Indonesia is projected at 8%, China at 6.5%, Philippines at 6%, Hong Kong and Singapore both at 4%.
Sharing his perspective on the findings, Rajul Mathur, Consulting Leader- Talent & Rewards, Willis Towers WatsonIndia said: “Though salary increases in India still continue to be among the highest in the region, companies aretaking a cautious approach and do not intend to make any significant changes from previous years. Companies are beginning to make selective skill-based compensation adjustments to cater to requirements around automation and digitisation. Going forward,organisations should continue to re-examine the alignment between their business and talent strategies, as well as how to remunerate and reward different segments of the workforce considering their core contribution to business success.”
While most sectors like General Industry, Chemical, High Tech and Pharmaceuticalscan expect salary increases around average mark of 10%, Energy, Financial Servicesand Consumer Products sectorsstand out for the highest year on year growth. The Energy sector is expected to see a jump from 8.5% in 2019 to 9.3% in 2020, the Financial Services is projected at 9.7% in 2020 from 9% last year and the Consumer Products sectors is expected to see an increase from 9.5% in 2019 to 9.9% in 2020.
Median salary increase at the Executive level for 2020 is projected at 10.1%, a noteworthy increase from 9.6% in the previous year. For Middle Management, Professional and Support Staff, an increase from10.1 % in 2019 to 10.4% in 2020 is projected. The employee group of Production Manual Labouris also projected to receive a higher salary increase of 10.3% as compared to 10% last year.
Highlighting a continued shift towards variable pay, especially at senior management levels, the survey found that actual variable pay at executive level increased from 20.7% in 2018, to 30.7% in 2019.
On salary increases by performance levels, the survey found that on an average, 25% of the salary increase budget is being allocated to top performers, which represents 11.5% of employees in India. This implies that for each Rs 1 allocated to an average or below-average performer, Rs 2.16 is allocated to a top performer compared to about Rs 1.3 last year.