India will see the lowest salary increase in a decade this year, says the biggest salary survey done in the country so far. Hirings, the study show, are at a low as companies look around to find ways to optimise talent and resources in this uncertain period.
The national average salary increase, at 9.1 per cent, is still the highest among major economies in Asia, ahead of China at 6.3. China’s was calculated before the full extent of the coronavirus outbreak, and hence, could slide down further.
The salary survey by Aon, on its 24th year, covered more than 1,000 organisations across 20 sectors. “The primary reason for the low projection is the general air of caution due to falling GDP,” said Tzeitel Fernandes, partner—rewards solutions at Aon.
Aon officials, however, point out that over 39 per cent organisations said their salary increase will be over 10 per cent. This is particularly true for e-commerce and tech/IT firms as well as pharma sector. The beleaguered auto and transport sector have the lowest salary hikes. Aon officials point out how this is not as bad as it was in 2009, when salary hikes plummeted from 15 to 6 per cent in less than two years, on the heels of the global recession.
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India's pay hikes have been on a downward spiral since 2016, the year of demonetisation. Hikes averaged 9.5 in 2018, falling to 9.3 last year, before dropping further now.
Organisations, Aon found, were trying to deal with the overall gloom by reduced hiring, including reduced replacement hiring, hiring at lower levels, double hatting, use of automation and HR moves like rewarding and spending more on key performers only.
