Indian employees may get an average pay hike of 9.4% in 2022, a survey found, amid optimism about an economic revival and a stiff competition for talent.
The projected increment is the highest since 2018 when the average raise was 9.5%, consulting firm Aon said in its India Salary Increase Survey of nearly 1,350 firms. After seven years of double-digit pay hikes, average increment figures in India fell to 9.3% in 2017, followed by 9.5%, 9.3%, 6.1% and 8.8% in subsequent years.
The survey said the pandemic accelerated the digital journey for organizations, triggering an unprecedented war for digital talent and boosting salary budgets. As a result, Indian companies reported a five-year-high attrition rate of 20% in 2021, sharply up from 12.8% last year.
The survey said 2021 witnessed high demand for key skills, pushing the actual salary hike to 8.8% as against a projection of 7.7%, as the economy gradually opened up, and the companies became resilient to deal with the second wave and manage growth. It also said firms indicated their desire to pay performers 1.7 times the average pay hike.
The technology sector continues to be the best paymaster, with an average hike of 11.2% in 2022, followed by professional services and e-commerce firms, which are expected to give a 10.6% pay raise. Similarly, ITes, life sciences and pharma and consumer goods sectors are set to offer 9.2-9.6% pay hikes.
Even the 2021 laggards like real estate and infrastructure are expected to pay an 8.8% hike against 6.2% in 2021. Similarly, the hospitality and restaurant sector is slated to pay a 7.9% hike. Energy and engineering design services will offer (7.7% both) the lowest pay hikes among key sectors, according to the survey. It said the energy sector will see a decline in staff increment from 7.7% in 2022 as against 8.2% previously.
Roopank Chaudhary, a partner at Aon’s human capital business, said, “Despite another wave of Covid-19, Indian have displayed resilience in riding through the tough times. While pandemic risk in India continues, the business sentiment and salary projections for 2022 tell us that employers are building for growth and are much better prepared than in 2020.”
“There is positive sentiment across sectors, and India Inc. is firmly on the path to recovery, with most firms projecting salary increases back to FY19 levels by FY22. Third wave or not, businesses continue to power through with strong momentum in mindset and preparedness,” said Jang Bahadur Singh, a senior consultant (performance and rewards) at the firm.
