1/4th of India Inc reports flat or drop in real wages: Study

Posted By: Pti
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Mumbai, Jan 16 (PTI) Almost one-fourth of thecompanies surveyed in India have opined that real wages totheir managerial-level employees have either been flat ordeclined over the last five years, a study has said.

The clerical, administrative and employees, who arecompensated on an hourly basis, have actually been hit harderwith over 25 per cent of the firms surveyed reporting thatreal wages had either been flat or declined, said TowersWatson''s Global Talent Management and Rewards Study 2010.

However, the incidence of real wage decline orstagnation for managerial-level employees over the past five-years for Japanese, US and Chinese companies is higher at 71per cent, 59 per cent and 47 per cent, respectively, it said.

This interesting revelation is in stark contradictionto the acknowledged fact, which the survey also endorses, thateconomic growth continues to drive increases in the real valueof rewards in Asia, including India.

"While India has an impressive growth rate which issecond only to China, the reason for the real wages being flator declined is the high inflation rate that the Indian economyhas been grappling with," the study said.

It also stated that the drop or the flattening in realvalue of wages to the managerial staff in almost one-fourth ofthe companies surveyed is "disturbing" since a majority of thefirms surveyed believe they offered opportunities to earnsignificantly higher levels of compensation to theirprofessional/managerial cadre. .

On HR interventions by Indian companies to combat the economic slowdown, the survey reveals that only 15 per centresorted to lay-offs, as compared to 50 per cent in Japan, 46per cent in Hong Kong and 29 per cent in Singapore.

"The bulk of Indian companies employed softermeasures like a hiring freeze (61 per cent), reduced bonuses(46 per cent) and salary freeze (35 per cent), the study said.

The survey captures the current landscape of rewardsand talent management representing 1,176 companies across 17locations, which includes firms in India across diversesectors, including manufacturing, financial services, hightechnology, healthcare, pharmaceuticals and retail.

As a consequence to real wages getting hit over thepast few years, almost 75 per cent of the companies in Indiaover a period of the next 12 months, would increase salary andbudgets if they are able to generate additional funds to spendon labour costs, the study said.

Another 55 per cent of the firms reported that theywould increase bonus opportunities, while 34 per cent reportedthat they would increase bonus eligibility.

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