India Inc. hikes salary by an average of 15.1 per cent

20 February 2008

New Delhi: Employees in India received an average salary increase of 15.1 per cent in 2007, up from 14.4 per cent in 2006, as revealed in the 12th Annual Salary Increase Survey by global human resources firm Hewitt Associates.

The report also predicts an increase of 15.2 per cent in 2008, making this the fifth consecutive year that salaries have demonstrated double-digit growth in India

Sandeep Chaudhary, leader of Hewitt's Rewards Consulting practice in India, said, "The struggle for talent and sustainability is large and rapidly growing in India.  Employees are increasingly looking for great career opportunities and are actively being pursued by other organizations offering extremely attractive opportunities and packages. Hence, organizations are using compensation as a strategic lever in attracting, retaining and motivating talent."

While salary increases are largely dictated by talent supply and demand, Hewitt Associates forecasts a very gradual decrease in salary increases, and a stabilization of increases to a range of nine to 10 per cent by 2012. 

Factors influencing stabilization include reducing the talent skill gap, changing the talent model, making training vital, and re-engineering talent.

Hewitt surveyed nearly 600 foreign-owned, locally owned, and joint-venture companies this year, analyzing information across 19 primary industries and 22 sub-industries. The study measures actual and projected salary increases, and compensation practices for six specific job categories, namely top executive, senior management, middle management, junior manager/professional/ supervisor, general staff, and manual workforce.