In 2020, only 45% of the companies that handed out hikes did so in the same range, showed the latest Salary Trends Survey in India by Aon, which analysed data across 1,050 companies from more than 20 industries.
The average salary hike in the ongoing calendar year stood at around 6% — the lowest witnessed in 23 years of the survey. In 2021, during which two-thirds of the companies either aim to provide similar or higher increments compared to those offered in 2020, the average salary hike has been projected at a little over 7%.
“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. “This is a special year — business leaders are putting investments in their employees and clients ahead of shareholder return.”
The industries looking to provide the highest salary increases are high technology, information technology (IT), ITenabled services (ITeS), life sciences, e-commerce, chemicals and professional services.
Meanwhile, companies in the hospitality, retail and real estate/infrastructure industries, which had given very low increases in 2020, are projecting a higher increase for 2021, but still trail most other sectors.
“Business and HR leaders made hard decisions in the second and third quarters of 2020 and are now betting on the green shoots of improving consumer demand,” said Sethi. “They see the need to invest in talent as a critical part of their recovery and growth prospects.”
Navneet Rattan, director at Aon in India’s performance and rewards solutions practice said, “The impact of Covid-19 has been varied on different sectors. We see high differentials in salary increases. The difference between industries with highest increase to lowest increase hits 7.2% points as compared to mere 2.4% points in 2019.”