It’s been a great year for India Inc employees as they earned a 10-year high average salary hike of 10.6 per cent in 2022 and they are projected to get an average 10.4 per cent raise in 2023, making it two consecutive years of double-digit salary growth for the workforce, according to Aon India’s 27th Annual Salary Increase Survey 2022 released on Monday.
This marks the return of double-digit salary growth as the last time it was this high was in 2012 when it hit 10.7 per cent, according to the survey of 1,300 firms across 40 industries.
With its 10.6 per cent salary hike this year, India has given out fatter raises compared to several developed economies in the world. This is because increments are still driven by the supply-demand factor in the Indian talent market compared to more developed economies where inflation plays a large role in increments, according to Roopank Chaudhary, Partner, Aon, India & South Asia.
This year, too, start-ups and e-commerce, IT/ITeS and other digitally oriented industries were among those who gave out the highest hikes.
If corporate India does give out 10.4 per cent in 2023, as projected by Aon India, that would make it two consecutive years of double-digit growth, which was last seen in 2015-16, according to the survey findings. But this also depends on the persistent attrition and the fair amount of margin pressure the IT sector companies are facing.
And India Inc. is witnessing 20.3 per cent year-to-date (YTD) attrition rate in 2022, the survey showed. While it has moderated from the 21 per cent last year, it still continues be one of the highest levels seen in over two decades now, according to Jang Bahadur Singh, Director, Aon, Human Capital Solutions. The sectors most affected by attrition are E-commerce, early-stage startups and IT/ITes, while most traditional ones such as auto manufacturing are seeing lower attrition, he added. But as the Covid-impacted sectors such as retail, hospitality and travel are bouncing back, the gap between voluntary and involuntary attrition levels has narrowed to around 3 per cent.
From an employee perspective, a high performer earned 1.7x more than an average performer who just met expectations in 2022. “While organisations are having higher salary budgets, the data shows that they are becoming focussed on performance indicators,” said Singh.
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