Indian companies have increased salaries by 8.8 percent on an average in 2021 and they are expected to pay an average 9.4 percent hike in salaries the next year, according to a recent survey. The increase in 2022 has been attributed to the Indian economy showing strong recovery and improved consumer sentiment.
Aon's annual salary increase survey analysed data from 1,300 companies in 39 industries across India. The survey said high attrition rates could be the strongest in the past decade and push salaries further up.
With a high double-digit attrition rate, the war for talent will escalate in India ensuring there is an increase in salaries.
Nitin Sethi, partner and CEO, Aon's performance and rewards businesses in India, said as most sectors are seeing positive sentiment, there is high investor confidence with sustained FDI flowing into India. This in turn is growing consumer demand across segments. Though 2021 had certain sectors performing under pressure due to the pandemic, most businesses are optimistic for 2022.
Aon has projected the top three sectors with the highest salary increase for 2022 will be technology, e-commerce, and IT-enabled services while hospitality, engineering services and energy will offer the lowest hikes.
The data shows an improved business sentiment and salary projections for 2022 with employers building for growth and are much better prepared than in 2020.
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Companies, according to Aon, are investing in digital capabilities to sustain the growth momentum and employees with digital and technological skills are the most successful and have also seen an increase in salaries in 2021.
"This trend will intensify over time, as organisations have an increased need for this talent to transform their business models and build resilient workforces," Roopank Chaudhary, partner, Human Capital Business, said.