According to the survey, companies dealing with technology platforms and products are also likely to see the highest hikes in salaries in 2023, with an industry average of 10.9%
New Delhi, NFAPost: India Inc will continue to record double-digit salary hikes, with salaries expected to increase 10.3 per cent in 2023.
According to global professional services company Aon Hewitt Global’s latest Salary Increase Survey, while the numbers see a marginal dip from the actual increase of 10.6% in 2022, India is the only major economy where the projected increase continues to be in double digits, notwithstanding concern about economic volatility.
Of the 1,400 companies surveyed across 40 industries, 46% of organisations are expected to hand out double-digit salary increases in 2023. Last year, salaries saw a higher-than-normal increase at 10.6%, as organisations had severely cut down on salary increments in 2020 and 2021 due to the pandemic.
“After Covid-19, the projected salary increase for 2023 is 10.3%, clearly highlighting the confidence of companies in India’s growth story,” says Pritish Gandhi, director and leader of the executive compensation and governance practice in India at Aon.
Experts see the numbers as an affirmative sign.
TeamLease chief business officer Sumit Kumar says organisations are caught between the devil and the deep blue sea where they have to manage rising costs and retain talent.
“Under the given circumstances, 10.3 per cent seems viable. While growing inflation and rise in lending interest rates could dampen sentiment of an average salaried employee, the silver lining is that there are no salary cuts which we have seen in earlier recession scenarios,” said TeamLease chief business officer Sumit Kumar.
Meanwhile, India’s attrition rate continued to climb in 2022, reaching 21.4 per cent. The survey pegged an ever-changing talent strategy and the ongoing gap between the supply and demand of talent as the prime causes for this increase.
Involuntary attrition also increased by virtue of recent layoffs. Financial institutions and technology consulting and services saw the highest involuntary attrition at 8.4 and 5.7 per cent, respectively, while manufacturing and automotive industries saw the lowest at 1.8 per cent and 1.9 per cent.
Aon India Partner, Human Capital Solutions said with first the Great Resignation and then the trend of Quiet Quitting, a sizeable proportion of employees appears disengaged from its workspace.
“Organisations are, therefore, facing a challenge in not only retaining talent but also driving productivity from existing employees,” said Aon India Partner, Human Capital Solutions.
Kumar points out that the talent gap is the principal reason for soaring hiring costs and higher attrition levels.
“Given the labour market dynamics where skillsets keep evolving, an organisation needs to adopt build versus buy strategy to overcome labour market challenges,” says Aon India Partner, Human Capital Solutions.
The technology sector is a prime example. According to the survey, companies dealing with technology platforms and products are also likely to see the highest hikes in salaries in 2023, with an industry average of 10.9 per cent.
The projections come amid reports of India’s information technology majors like Wipro backtracking on its initial offers of annual salary packages from Rs 6.5 lakh to Rs 3.5 lakh for freshmen.
Freshman employees have been hurt the most as India’s Big Tech like Infosys and Wipro rationalised their salary spend — onboarding remains tardy, placement hirings scarce, and hundreds of freshman employees laid off if they failed the companies’ internal assessment tests.
“Globally connected industries, such as technology platforms and products, are somewhat cautious in their salary budgets, while industries driven by domestic demand, such as manufacturing or fast-moving consumer goods/fast-moving consumer durables, are bullish on their budget planning, compared with their five-year averages,” Chaudhary points out.
