As the economy continues to falter, salaries in India are projected to rise 10 per cent in 2020, says a report. In 2019, the effective wage increase was 9.9 per cent which is projected to touch 10 per cent next year. While salary increases are stabilising around the 10 per cent mark, they remain the highest in the Asia Pacific region, according to the Salary Budget Planning report released by Willis Towers Watson. Indonesia is projected at 8 per cent, China at 6.5 per cent, Philippines at 6 per cent, Hong Kong and Singapore both at 4 per cent.
"Though salary increases in India 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," Willis Towers Watson India consulting leader (talent & rewards), Rajul Mathur, said.
Companies are beginning to make selective skill-based compensation adjustments to cater to requirements around automation and digitisation, he said. It looks at a range of industry sectors and job grades, focusing on salary movement and review practices to assist companies with their compensation planning. The survey said the median salary increase at the executive level for 2020 is projected at 10.1 per cent, an increase from 9.6 per cent in the previous year.
For middle management, professional and support staff, an increase from 10.1 per cent in 2019 to 10.4 per cent in 2020 is projected.
The employee group of production manual labour is also projected to receive a higher salary increase of 10.3 per cent as compared to 10 per cent last year. "Attracting and retaining the right talent at leadership positions is commanding higher pay increases as the leadership pool continues to be limited. The increase is mostly in terms of variable pay as there is a greater focus on pay for performance," the company's director (rewards) Arvind Usretay said.
On salary increases by performance levels, the survey found that on an average, 25 per cent of the salary increase budget is being allocated to top performers, which represents 11.5 per cent of employees in the country.
This implies that for each Rs 1 allocated to an average or below-average performer, Rs 2.16 is allocated to a top performer compared to about Rs 1.3 last year, the report said. Of the surveyed companies, 28 per cent have projected a positive business revenue outlook for the next 12 months, down from 37 per cent in 2018.
Whereas, 61 per cent expect no big change as compared to 57 per cent last year; and, 11 per cent have a downward revenue projection compared to 5 per cent in 2018, it said.