Salaries in India are projected to rise 10% in 2020, marginally higher than the actual increase (9.9%) in 2019, according to the latest Q3 2019 Salary Budget Planning Report released by Willis Towers Watson, a leading global advisory, broking and solutions company.
While salary increases in India are stabilising around the 10% mark, they remain the highest in the Asia Pacific region. Indonesia is projected at 8%, China at 6.5%, Philippines at 6%, Hong Kong and Singapore both at 4%, the report stated.
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."
Of the surveyed companies, 28% have projected a positive business revenue outlook for the next 12 months, down from 37% in 2018. As many as 61% of them expect no big change as compared to 57% last year, and 11% have a downward revenue projection compared to 5% in 2018, according to a Willis Towers Watson release that encapsulated the findings of the report.
While most sectors like general industry, chemical, high tech and pharmaceuticals can expect salary increases around the average mark of 10%, energy, financial services and consumer products sectors stand out for the highest year-on-year growth.
The energy sector is expected to see a jump from 8.5% in 2019 to 9.3% in 2020, the financial services sector is projected at 9.7% in 2020 from 9% last year and the consumer products sector is expected to see an increase from 9.5% in 2019 to 9.9% in 2020.
Median salary increase at the Executive level for 2020 is projected at 10.1%, a noteworthy increase from 9.6% in the previous year. For middle management, professional and support staff, an increase from 10.1 % in 2019 to 10.4% in 2020 is projected.
The employee group of production manual labour is also projected to receive a higher salary increase of 10.3% as compared to 10% last year.
On salary increases by performance levels, the survey found that on an average, 25% of the salary increase budget is being allocated to top performers, which represents 11.5% of employees in India. This implies that for each INR 1 allocated to an average or below-average performer, INR 2.16 is allocated to a top performer compared to about INR 1.3 last year.