Devina Sengupta
devina.sengupta@livemint.com
MUMBAI
Annual appraisals
may fetch anaver age pay hike of
9.5% this year
while top performers stand towin1.74 times
more, a survey of employers
found, in an indication of companies going the extra mile to
retain top talent. This will also be the lowest
pay hike since 2021, when the
average increase was 9.3%. Last
year, companies had given an
average hike of 9.7%, the survey
by consulting firm Aon
showed. Even though pay hikes
may be on similar lines as last
year, it may make a bigger difference this year, Aon said,
pointing to the decline in inflation. The real wage growth (salary increase minus inflation)
this year will be 4.9%, against
last year’s4.2%, it said.“In2023, organizations navigated a challenging environment, balancing a generous
average salaryincrement amid high attrition rates. As leaders
preparefor 2024, their focusis
likely toshift towardsbuilding
a supportive work environment to foster employee
engagement in a dynamic job
market,” said Jang Bahadur
Singh, Aon’sdirector for Talent Solutions. Aon surveyed 1,414:
companies from almost 45
industries for its study titled
Annual Salary Increase and
Turnover Survey 2023-24,
India.
Aon’sistheyear’sfirstsurvey
on compensation, usually followed by similar studies from
Deloitte and Mercer.
While the Indian economy
clocked surprising growth of
7.6% in the second quarter,
prompting the government.
TURN TO PAGE 6
Lower pay hikes
likely, but top
talent to shine
FROM PAGE 1
and the central bank to
increase their projections for
the year, interest rates remain
high, and many companies in
the startup and tech sectors
have had toreduce headcount
and pause hiring as a funding
winter dragged on. Pay hikes at nearly the same
levels as last year come in the
backdrop of global economic
sluggishnessanda temperingof
hiring sentimentsin the private
sector. However, easing inflationary pressures will lead to
more cash in the employee’s
pocketsafterthe hikes, Aon said.
Non-bank lenders may be
the most generous with pay
hikesthisyear,handing out an
average 11.1% raise. This is followed by manufacturing com panies with10.1%, life sciences
and financial institutions
(9.9%), and global capability
centres (9.8%). E-commerce
firms and IT services, which
had waged a talent war in 2022,
areexpected toroll outhikes of
9.2% and 8.2%, respectively.
According to the founder of
aneducation-based fintech and
NBFC (non-banking finance
company), getting good prod- compliance Non-banklenders nomiclandscape.
expertsishard. “If may be the most Despiteaconservwe have torecruit generous with ative glgbal seqtia mid-level prod- pay hikes this ment, ¥ndustr1es
uct manager who . suchasinfrastruc- . year, handing out was earning 330 ture and manufaclakh, we will offer an aver ? ge turingcontinue to
360lakh at least,” of 11.1% project robust
the founder said. — growth, indicatPrivate lenders ing the need for
are also facing challenges in
retaining talent. The human
resources chief of one of the
three largest private banks
commented that employee
costsareso high that his bankis
forced toreduce campus hiri and focusonin house-talent.
Despite the macro-economic
headwinds, many companies
are betting on do mestic demand
and those that are little exposed
to the US and Europe are faring better.InFebruary, the Reserve
Bank of India’s (RBI's) monetary
policy committee (MPC) kept
the benchmark interest rate
unchanged forthe sixthstraight
time, citing persistent risks from
food inflation and incomplete
transmission of monetary policy. RBI governor Shaktikanta
Das highlighted that the “last
mileofdisinflation” towards the
4% inflation target is the most
challenging, signalling that rate
cutsmay not be imminent.
“The projected increase in
salaries in the Indian formal
sector indicates a strategic
adjustment in response to the evolving economic landscape more accurately
measured given the target-oriented profiles, high performers
canearnpay hikesthatare 2.0lx
oftheir regular counterparts. At
professional services, the corresponding figure is1.78x.
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