Homeeconomy News

    Indians to see 10% salary hike in 2020, but new job additions may be muted

    Indians to see 10% salary hike in 2020, but new job additions may be muted

    Indians to see 10% salary hike in 2020, but new job additions may be muted
    Profile image

    By Moneycontrol News  IST (Updated)

    Mini

    While most sectors like chemicals, high-tech and pharmaceuticals can expect average (10 percent) salary increases, others like energy, financial services and consumer products sectors stand out for the highest year-on-year growth.

    Despite a muted outlook on new job additions, salaries may see a standard 10 percent hike in India in 2020.
    According to Q3 2019 Salary Budget Planning Report released by Willis Towers Watson, only 22 percent of the organisations in India plan to add to their headcount in 2020 compared to 29 percent in 2019.
    With the business outlook cautious, recruitment is expected to slow down. The survey shows that organisations planning to maintain their current headcount increased to 70 percent in 2019 from 63 percent in 2018. Further, seven percent companies plan to reduce headcount as compared to eight percent last year.
    Rajul Mathur, Consulting Leader- Talent & Rewards, Willis Towers Watson India said, “Though salary increases in India still continue to be among the highest in the region, companies are taking a cautious approach and do not intend to make any significant changes from previous years. Companies are beginning to make selective skill-based compensation adjustments to cater to requirements around automation and digitisation.”
    The survey looks at a range of industry sectors and job grades, focusing on salary movement and reviews practices to assist companies with their compensation planning. The Q3 survey was conducted in July with 4,521 sets of responses received from 1,128 companies across 20 markets in Asia Pacific, including 337 from India.
    Sectoral trends
    While most sectors like chemicals, high-tech and pharmaceuticals can expect average (10 percent) salary increases, others like energy, financial services and consumer products sectors stand out for the highest year-on-year growth.
    The energy and financial services spaces are expected to see a jump to 9.3 percent and 9.7 percent in 2020 from 8.5 percent and nine percent last year, respectively. Consumer products is expected to see an increase to 9.9 percent in 2020 from 9.5 percent in 2019.
    Salary increase by management and performance level
    Median salary increase at the executive level for 2020 is projected at 10.1 percent, a noteworthy increase from 9.6 percent in the previous year. For middle management, professional and support staff, an increase to 10.4 percent in 2020 from 10.1 percent in 2019 is projected.
    The employee group of 'production manual labour' is projected to receive a higher salary increase of 10.3 percent as compared to 10 percent last year.
    Highlighting a continued shift towards variable pay, especially at senior management levels, the survey found that actual variable pay at executive level increased to 30.7 percent in 2019 from 20.7 percent in 2018.
    Arvind Usretay, Director, Rewards, Willis Towers Watson India, said, “Leadership positions are commanding higher pay increases as the leadership pool continues to be limited. The increase is mostly in terms of variable pay as there is greater focus on performance pay. That said, companies are also working towards more robust succession planning programmes in order to develop a sustainable leadership pipeline.”
    On salary increases by performance levels, the survey found that on an average, 25 percent of the salary increase budget is being allocated to top performers, which represents 11.5 percent of employees in India. This implies that for each Re 1 allocated to an average or below-average performer, Rs 2.16 is allocated to a top performer compared to about Rs 1.30 last year.
    Premium skills in demand
    In the technology, pharmaceutical and FMCG sectors, key account management roles are in demand, while data science and machine learning specialisation is being favoured in engineering.
    Further, the report identifies blockchain, artificial intelligence and machine learning, cybersecurity and development operations as the most in demand technology skills in the next 12 months, where employers are willing to pay a premium to acquire talent.
    Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
    arrow down

      Most Read

      Market Movers

      View All
      CompanyPriceChng%Chng