Salaries in India are projected to continue with double-digit growth in 2023 despite economic volatility, according to the latest survey by global professional services company Aon plc. The 28th Annual Salary Increase Survey predicted salary in India to rise 10.3 per cent in 2023 compared to an actual increase of 10.6 percent in 2022.
Even as the projections are slightly lower than last year, the hike continues to remain in the double digits despite concerns about economic volatility. The salary hike is expected in response to attrition rates. The survey noted that the attrition rate in India for 2022 remained high at 21.4 percent due to the ever-changing talent strategy and the ongoing gap between the supply and demand of talent. In 2022, salaries in India witnessed an actual increase of 10.6 per cent. The study analyzed data across 1,400 companies from more than 40 industries.
The survey projected an increase of 10.9 per cent salary rise in technology platforms and products followed by 10.8 per cent in global capability centers, and 10.7 per cent in technology consulting and services. While financial insitutions are expected to see a hike of 10.1 per cent in 20223.
While e-commerce will witness 12.2 per cent hike and retail is projected to see a hike of 9.7 per cent in salary.
“India Inc has awarded aggressive salary increases over the last two years, which has some companies grappling with higher wage bills. Globally connected industries, such as Technology Platform and Products, are somewhat cautious in their salary budgets while industries driven by domestic demand, such as Manufacturing or FMCG/FMCD, are bullish on their budget planning as compared to their five-year averages,” said Roopank Chaudhary, partner, Human Capital Solutions, India at Aon.
Explaining the reasoning behind the expected hike, Pritish Gandhi, director and leader of the Executive Compensation and Governance Practice in India at Aon, said, “The non-merit salary increase projections continue to be moving up as firms budget for retaining talent through promotions and off-cycle corrections. As companies look to differentiate and optimize their talent spend, employers are investing more for critical talent in key roles."
Even as businesses need to adapt pay increases for both merit and non-merit factors, Gandhi said organizations must take a strategic approach to total rewards to build a resilient workforce and shape their strategies towards long-term drivers of pay and performance.