According to a study, salary increment in India will reach a five-year high of 9.9% in 2022, as companies intend to invest in new-age capabilities to build a resilient workforce amid robust economic recovery and solid business mood.
9.9% Salary Increase Across Industries In 2022 Compared to 9.3% in 2021
According to the 26th Compensation Increase Survey in India conducted by renowned global professional services business Aon, organizations across industries expect a 9.9% salary increase in 2022, compared to 9.3% in 2021.
E-commerce and venture capital, hitech/IT and IT enabled services (ITeS), and biological sciences are the industries with the largest predicted compensation increases, according to the survey, which analyzed data from 1,500 organizations across more than 40 industries.
Highest Attrition In Two Decades
The highest attrition figures in over a decade was recorded by survey participants in 2021, the research stated, adding that the biggest attrition in over two decades shows the impact of the 'Great Resignation' on India.
"Salary hikes should provide a pleasant reprieve for employees in the middle of a tumultuous moment. When the rising cost of talent is combined with record-high attrition rates, it might be a double-edged sword for employers "Partner and CEO of Aon's Human Capital Solutions in India, Nitin Sethi, stated.
"This trend is spurred by economic recovery and the need for organizations to invest in new age competencies to build a resilient workforce," Sethi continued.
33% Businesses Intended To Grant Double Digit Compensation
According to the poll, a favorable business outlook leads to more double-digit increments. Around 88% of businesses anticipate to improve their business outlook in 2022, up 11% from 2021. Additionally, 33% of businesses intend to grant double-digit compensation increases in 2022, up 5% points from 2021.
"We believe that the fundamentals of the Indian economy remain strong, and that there is a positive business sentiment," said Roopank Chaudhary, partner in Aon's Human Capital Solutions in India. "Even sectors that struggled during the first wave of the pandemic, such as retail, logistics, and quick-service restaurants, have bounced back by focusing on modern trade/digital channels, which is reflected in salary increases of 8% and above," he added.
"We do see some possible headwinds due to expected high inflationary pressures and the still-present pandemic threat," Chaudhary said.
Despite of few difficult months due to the second & third waves of infections, India continues to project the biggest salary rises among the BRIC (Brazil, Russia, India, and China) countries in 2022. According to the survey, pay increases will be 5.0% in Brazil, 6.1% in Russia, and 6.0% in China.
