India Inc employees to get a 6.4% average salary hike in 2021

Salaries in India are projected to rise by an average of 6.4% in 2021 (translating to a median increase of 7%), according to Willis Towers Watson's latest Salary Budget Planning Survey report. This is marginally higher than the average actual increase of 5.9% in 2020.  

Mudit Kapoor, Pragati Srivastava

As per the survey, on average, 20.6 per cent of the salary increase budget is being allocated to top performers, which represent 10.3% of the employees in India. This implies that for each Rs 1 allocated to an average performer, Rs 2.35 is allocated to a top performer and Rs 1.25 is allocated to an above-average performer.

The survey further notes that median salary increase at the executive level for 2021 is projected at 7%, a slight decline from 7.1% in the previous year. For middle management, professional, and support staff, a decrease from 7.5% in 2020 to 7.3% in 2021 is projected.
A comparison of projected salary increases across key markets in Asia Pacific this year shows that Indonesia is projected at 6.5%, China at 6.0%, Philippines at 5%, Singapore at 3.5% and Hong Kong at 3.0%.

Of the surveyed companies in India, 37% have projected a positive business revenue outlook for the next 12 months, up from 18% in Q3 2020. However, recruitment is yet to pick up. The study shows that only 10% of the organisations in India plan to add new headcount compared to 14% last quarter.

High Tech, Pharmaceuticals and Consumer Products & Retail project a median salary increase around 8%, which is more than the General Industry projection. The Financial Services and Manufacturing sector projects a 7% increase in 2021, while the BPO sector is at 6%. The Energy sector is expected to see the lowest increase of 4.6%.