Increase in salary likely to be around 10.8%, the highest in Asia Pacific region
GN Bureau | June 19, 2015
Salary levels in India are likely to exceed growth figures of the country, which is good news for professionals. While most of forecasts predict that India’s growth will be in the range of 7.5% the increase in salary is likely to be around 10.8%.
In fact, salary increase in India is going to be among the highest in Asia Pacific region, says the '2015-16 Asia-Pacific salary budget planning' report of Towers Watson, a global HR consulting firm.
India growth figures are important as the report says that key reasons for aggressive salary budgets of the companies are a favourable economic sentiment, fall in inflation levels and oil prices.
"The overall salary increase in 2014 was 10.5% with inflation at 7.2%, indicating a real increase of 3.3%. So an effective jump from 3.3% to 5% this year will bring much cheer to Indian employees. While it's too early to predict increases for 2016, the general sense is that companies will budget in the same range as 2015, perhaps the net increase will be a tad lower given the moderating inflation levels", said Sambhav Rakyan, Data Services Practice Leader, Asia Pacific at Towers Watson.
The survey, timed to coincide with companies' compensation planning for 2015, looks at a range of industry sectors and job grades from factory shop floor to executive suite. The findings illustrate the challenge to businesses in the region as they seek to balance cost control while continuing to offer salaries sufficient to attract and retain skilled employees.
The survey found that across all industries in India, almost 87% of respondents plan to allocate a larger portion of their budget to high performers. The High Tech industry stands out with 11% companies planning to allocate the entire budget increase to high performers.
In India, salary increase for the 'highest-performing' employees’ average 12%, which is 30% higher than 'average' performers and nearly twice the regional average. India is clearly among the front-runners with a 10.8% average salary increase, ahead of countries like Indonesia at 9.5%, China at 8.6% and Philippines at 6.7%. Mature markets will expectedly see lower increases with Hong Kong and Singapore both at 4.5%, Australia at 3.5% and Japan lowest at 2.5%.
"What's important to note is that base pay/salary is the clear number one attraction & retention driver in India, both for the employer as well as the employee. As salary budgets continue to stabilise, we will increasing see a larger portion of salary budget increases being allocated to high performers and critical skill employees." said Rakyan.
The survey was conducted in February 2015. Around 2,000 responses were received from companies across 19 countries in the APAC region.
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