Beware, slowing US to slow down hikes

The world may not end in 2012, as forecast by some doomsday believers, but the situation on the salary front, next financial year, definitely looks gloomy.

Thanks to the slow down in the US, a steep salary hike is not on the cards next financial year. The increase in the hikes, which was around 12-13% this financial year, may actually come down to single digits next financial year if the current macro-economic conditions continue to prevail.

According to experts, IT and ITeS  sectors might see a 9-10% hike, while others might see a hike of 5-8%.

With the overall business getting affected because of lower volumes and pricing, companies will be cautious in doling out hikes. “The average hike this year may actually come down by 2-3%,” said Srishti Anand, research analyst from Angel Broking, a brokerage firm. “For offshore employees, we expect the increase to range around 10%, and for onshore staff the hike may range around 2%.”

Sristi said the hikes could come down further if the situation in the US and the Europe worsens.

According to Sangeeta Lala, co-founder and senior vice-president, Teamlease, sales and marketing teams may get preference over others. “They are usually the ones who directly contribute towards revenue of a firm. So their salary will be linked with company’s performance,” she said.

So, will the companies take into account the high inflation before deciding on the hike? Though companies said it is too early to comment, experts working closely with companies said hikes will be based purely on performance.

“On a good year companies do think of such measures, but considering the slow down, there is little room for such considerations,” said Kris Lakshmikanth, founder chairman and managing director, Head Hunters, a Bangalore-based recruitment firm.