New Delhi: Global talent, retirement and health solutions provider Aon Hewitt Thursday projected a 10.6 percent salary increase for India Inc. in the current year.
The latest findings were furnished by the company in its 19th annual salary increase survey of more than 580 companies.
The survey results reflect a positive yet cautious sentiment in India Inc. towards salary increases, the firm said.
“On the back of improving business confidence, a stable government and moderating inflation there is a significant improvement in business confidence across companies, however this confidence is not reflecting in salaries," said Anandorup Ghose, rewards consulting practice leader at Aon Hewitt India.
The projected salary increase number shows a subtle improvement over increments in the last three years, Ghose said.
Sectors such as life sciences, engineering services, chemicals and media are among the industries with higher increase in pay than the market average.
However, real estate and infrastructure sector is expected to lead the salary increase pack this year.
Meanwhile, services industries like retail, financial institutions and hospitality represented the lower end of salary increase projections.
The survey highlighted that top performers are expected to get 1.6 times the salary increase of average performers. This trend is evident in most of the service industries such as banking and other financial services (BFSI).
A steady trend towards greater performance-based salaries also emerged in the study, pointing to a shift in overall pay philosophy across Indian companies.
“It’s heartening to see that even in good years India Inc. is showing greater focus towards driving performance-based differentiation in pay budgets," Ghose commented.
"This will enable companies to manage their compensation costs much better than they have been in the past."
The survey showed that attrition rates in 2014 continued to be at par with 2013 at 18.1 percent; however key talent attrition witnessed a 31 percent jump.
The study added that 76 percent of the 500 plus organisations which were surveyed have indicated an increase in their benefits budget.
"Increase in salary linked benefits (retirals), introduction of new benefits and change in the number of people availing benefits are some of the reasons for this increased budget," the survey added.