At 12.9% average, salary hikes to be better this year

Average salary increases this year are estimated to be 12.9%, the highest in the Asia-Pacific region, this year.

And for the first time since the economic slowdown in 2008-09, many sectors of the economy will see double-digit salary hikes, a survey by international human resource consulting firm Aon Hewitt said.

A similar survey in early 2010 had predicted a 11.7% average hike for that year.

Within Asia, China and Philippines are expected to have the next best hikes at 9% and 7%, respectively.

Yet, the increase in paypackets would remain well short of the 15% or more seen during the job boom in 2007 and 2008, said Aon Hewitt, which surveyed 531 companies in India  during December-January.

Nitin Sethi, India practice leader, broad based compensation, Aon Hewitt, said that factors like domestic consumption, investment in infrastructure, growth in services, etc. will contribute towards the salary hikes.

“Over the next three to five years, salary hikes will be between 12 and 15% across sectors,” said Sethi.

Industry experts feel that hikes will vary between 10-15% this year depending on performances, with top performers getting even upwards of 20%.   

VP Kamath, CEO, Apollo Hospitals (Mumbai), said that the healthcare/ pharmaceuticals/ medical devices sector should witness hikes of 10-14%.

“The sector itself is seeing 15-16% growth. With more hospitals being set up, the need for attracting and retaining talent will be of prime importance.”

Nandita Gujar, senior vice-president and group head, human resources at Infosys Technologies, India’s second-largest IT firm, said 10-15% hikes is what the company would give.

Rohan Dalal, managing director of legal process outsourcing firm Mindcrest, said the numbers for his company would be the same too.

The survey said along with increments, there would be a shift in the variable to fixed pay ratio, with the variable component at the senior level now comprising 22% of the total compensation, compared with 16% ten years ago.

While at the junior level, the variable part would be 11%, up from 7% in 2001. The variable component depends on the performance of the employee as well as the organisation.

Sethi said that the variable component is necessary to drive high performance and it will rise going ahead.