Indian Inc's average pay hike declines from 15.1% to 10.2% in a decade, shows Survey
Those in jobs in the private sector have always consoled themselves, when the issue of long working hours and little job security, when compared to the public sector, or what is better known as government jobs is pointed to them. And the balm for such a consoling usually comes in the package of a higher pay, which is incremented almost on a yearly basis, a practice not followed in the public sector.
But if the latest survey is to be taken into account, such a thinking might not be as accurate as it once was. It has revealed that the average pay hike has seen a drop from 15.1 per cent in 2007 to 10.2 per cent in 2016. Indian companies, across industries, have reportedly paid lower salary hikes consistently over the past decade and the pattern shows little signs of changing.
The has been revealed under an analysis of India Salary Increase Survey by consulting firm Aon Hewitt. The company has also projected that 2017 would witness an average increment of only 9.5 per cent which will be the lowest since 6.6 per cent in 2009, which was the result of the recession that gripped the world at the time.
Though the figure for the hike might still look inviting. But when put in a context of inflation and taxes, they might lose that shine.
Anandorup Ghose, partner Aon Hewitt India, is quoted by a leading national daily, as having said "Even a 9.5 per cent average salary increment might look promising, but is not. For example, if you see Reserve Bank of India's (RBI) latest householders inflation expectations surveys, the real pay increases adjusted for inflation would look very muted, and add to that the tax surcharge for employees earning more than Rs 50 Lakh, it translates into negative real pay increase."
According to Ghose, while a decade ago, sectors such as telecom and banking, financial services and insurance were the ones which were the major acquirers of talent, now there is no one particular sector which can be put into the category.
But sectors such as Consumer products and life sciences seem to have emerged as market leaders in terms of giving salary increase in the past decade. According to reports, pay hikes in life sciences sector picked up from 13.2 per cent in 2007 to 16 per cent in 2008 only to be projected to drop to 11.3 per cent in 2017, with minor fluctuations. In consumer products, employees received 13.4 per cent average pay hikes in 2015 and might get 10.2 per cent in 2017, Aon Hewitt data shows.
And what can be considered even worse news for those in the countries IT sector, one of the largest employers in the country, which has witnessed the dismissal of many employees recently, has also seen a steep decline in salary hikes as well. The average pay hikes in the sector dropped from 15.4 to 10.6 per cent in the period under consideration. This year's projection for the sector is 9.7 per cent.
Venkat Shastry, Partner, Heidrick & Struggles, a worldwide executive search firm, was reported to have said, "I won't be surprised if the salary increments go on a downward spiral as the traditional IT offerings - like pure play software, products and consulting services - will be increasingly substituted by automation and robotics."