Double-digit pay hikes, robust hiring on the cards in India, says Mercer

July 22, 2011
Double-digit salary increases and creation of new jobs will continue in the Indian economy, says a survey conducted by the consulting firm, Mercer. According to the Mercer India Monitor, a study of 90 companies released last week, India Inc is expected to provide an average salary hike of 12.7%, with the automobiles sector providing an estimated 14% hike, with IT & Telecom at the lower end of the spectrum, with 11.8%.
Salary hikes across sectors, however , remain higher than last year, with the exception of pharmaceuticals , where the increase is estimated to be about 12.8% in 2011, down from 13% last year. Other sectors like chemicals may see a 13.4% salary increment, while consumer durables , financial services & insurance and manufacturing are likely to dole out hikes of 13.8%, 12.6% and 13.4% respectively.
Salary increments have, however, not touched the high of 2006-07 , when the average increments were close to 15% across industry, but may eventually do so. “If the current trend continues, salary increases could go back to the levels of 2006-07 ,” says Shamita Chatterjee, market business leader (information product services) at Mercer India. “Because of a significant churn in the market and recruitment of fresh graduates, as well as early promotions as a retention measure, the overall wage movements are no more than 8%.”
Actual salary increases for 2010 stood at 11.8% Companies appear to have factored in inflation when planning increments and drawing up business plans. “About 42% of the companies surveyed have already implemented measures to fight inflation,” says Chatterjee. “Like increasing travel and fuel allowances. About 38% of the companies say they will provide an additional 5% salary increase to combat inflationary depletion of income, while another 1% say they will provide for 2-3 % additional increase.”
At the same time, some companies are also cutting down on travel (especially for training) and allowing employees more work-from-home options, Chatterjee adds. Hiring is also likely to continue, as two-thirds (67%) of employers said they would conduct both fresh and replacement hiring. About 80-83 % of respondents, in chemicals, consumer and IT & telecom, echoed the same thought, as did 67% of employers in pharma and 72% in manufacturing .
According to the India Monitor , most jobs are expected to be created in functions such as sales, marketing and technical and engineering , with at least half of the respondents expecting to increase their employee headcount in these areas, from 2010 levels. Also, about one-third of employers surveyed said they will hire in other functions such as HR, finance and accounting and information technology. “Hiring decisions do not seem to be affected by the economic upheavals that we are witnessing in the current scenario,” says Chatterjee.
Article Courtesy – Economic Times

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Interesting!



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