Average pay hike stands at 6.1% in 2020
Cos may offer 7.3% pay rise in 2021; Sectors such as Hi-tech, IT, ITeS, life sciences, e-Commerce offering high salaries: Survey
New Delhi: Companies in India doled out an average salary increase of 6.1 percent this year, the lowest in more than a decade, amid the coronavirus-induced economic slowdown, but are expected to give a pay hike of 7.3 percent in 2021, says a survey carried out by Aon plc, a leading global professional services firm. The survey revealed that organisations in the country have shown tremendous resilience despite the Covid-19 challenges and are betting on recovery. As many as 87 percent companies plan to give salary increases in 2021 compared to 71 percent in 2020. According to the survey, companies in India gave an average pay increase of 6.1 percent during 2020, the lowest since 2009 when the average was 6.3 percent. The latest Salary Trends Survey in India also noted that companies in India will give an average pay hike of 7.3 percent in 2021.
"This is a special year business leaders are putting investments in their employees and clients ahead of shareholder return. Despite the gravity of the Covid-19 pandemic in India and its deep impact on the economy, organisations in India have shown tremendous resilience and a mature view on talent," said Nitin Sethi, a partner at Aon and CEO of the firm's Performance and Rewards Solutions practice in India.
As per the findings based on an analysis of data across 1,050 companies from more than 20 industries, as of September-October 2020, 87 percent of surveyed companies said they intend to pay out salary increases in 2021 and 61 percent of these organisations plan to offer increases between 5 percent and 10 percent. In 2020, 71 percent of companies provided salary increases and of this group, only 45 per cent gave hikes in the range of 5 to 10 per cent.
The survey also said that two-third of the companies either aim to provide similar or higher increments in 2021 compared to the increments offered in 2020. Further, Sethi said "business and HR leaders made hard decisions in second and third quarters of 2020 and are now betting on the green shoots of improving consumer demand. They see the need to invest in talent as a critical part of their recovery and growth prospects". The industries looking to provide the highest salary increases are High Technology (Hi Tech), Information Technology (IT), IT Enabled Services (ITeS), Life Sciences, E-commerce, Chemicals and Professional Services.