India Inc employees to see a 10.8% salary increase in 2016: Report

The projected higher overall salary increases are despite the fact that around 58 per cent employers in the third quarter are less upbeat on the business outlook for India than they were in the first quarter, the report said.

Sreeradha Basu
  • Updated On Nov 26, 2015 at 06:41 PM IST
MUMBAI: India Inc employees are expected to see an overall salary increase of 10.8% in 2016, according to US-based global professional services company Towers Watson.

The net salary increase, factoring in inflation at 6.1%, is expected to be marginally higher at 4.7% against 4.5% in 2015 when inflation was at 5.9%, the company said in its 2015-16 Asia-Pacific Salary Budget Planning Report.

Interestingly, salary increases are expected to be higher even though employers in the third quarter are less upbeat on the business outlook for India than they were in the first quarter. Employers with a positive outlook shrank to 41% from 58%.

“Employers may be bearish in thinking there is a weak business outlook given the current poor market data, but the case is the opposite for employees, who hold bullish expectations for salary rises,” said Sambhav Rakyan, data services practice leader-Asia Pacific at Towers Watson.

“This mismatch in belief tells us there isn’t always a positive correlation between economic sentiment and staff expectations. Employers will need to carefully and proactively manage employees’ longer term expectations, if they are to achieve a harmonious and content workforce.”

The third quarter survey results show a similar trend to that of the first quarter in terms of higher increases going to top performers. The report shows that across employee levels, the top performers get higher increases averaging 12.5%, while above average and average performers are likely to get 11% and 9.7% raises, respectively. A similar trend is evident in the three core industries in the survey: financial services, technology and healthcare/pharmaceutical.

“To reward employees based on their performance offers them a great incentive and also reflects growing market maturity. It also shows the rising competition for talent. We can expect greater segmentation and personalised delivery for compensation, with a corresponding increase in different forms of reward options, especially for high performers,” added Rakyan.

Sectorwise, the high tech sector in India is expected to see a healthy increase of 0.70% in salary at 10.7% compared with 10% in 2015.

The energy sector has the highest projected increase at 11.5% while the financial services sector will see a modest 10.4%, with the projected salary increase for 2016 not as high as other sectors, according to the report.

The report is a bi-annual survey compiled by Towers Watson’s Data Services Practice (TWDS). The survey, which looks at a range of industry sectors and job grades, was conducted in July 2015. Approximately 2,000 responses were received from companies across 22 markets in the Asia Pacific.
  • Published On Nov 26, 2015 at 06:35 PM IST
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