India Inc. to hand out five-year high hike of 9.9% in 2022: Aon study

India Inc. plans to hand out a five-year-high average salary hike of 9.9 per cent in 2022 as businesses move beyond the pandemic to focus on growth, according to Aon’s 26th Annual Salary Increase Survey released on Wednesday. 

The projected figure is an increase on the actual hike of 9.3 per cent handed out in 2021 and hovers close to the 2016 figure of 10.2 per cent, the report revealed. 

The industries with the highest projected salary increases are e-commerce (12 per cent ), Hi-Tech/Information Technology (11.6 per cent ), Professional Services (10.9 per cent ), IT enabled services (10.7 per cent ), Entertainment and Gaming (10.2 per cent ) and Life Sciences (9.6 per cent).  The sectors with lowest projected increases are Metals/Mining (8.3 per cent ), QSR/Restaurants (8.5 per cent) and Cement (8.6 per cent), according to the study conducted across 1,500 companies from more than 40 industries. 

Further, a third of the organisations are expected to give double-digit salary hikes in 2022, an increase of five percentage points from 2021. 

“Salary increases should come as a welcome break for employees amidst a volatile period. For employers, it could emerge as a double-edged sword when you combine the rising cost of talent with record-high attrition numbers. This trend is fueled by economic recovery and the need for organizations to invest in new age capabilities to build a resilient workforce,” said Nitin Sethi, partner and CEO of Aon’s Human Capital Solutions in India. 

The positive salary hike projection also comes amid a two-decade high overall attrition rate of 21 per cent as there is a churn in the white-collar jobs in the country, the report said. Voluntary attrition is lower at 15.4 per cent. 

The report pointed out that the war for talent has been about acquiring digital skillsets across sectors. 

“As supply struggles to match demand, people costs and attrition numbers will continue to be high. Some areas that organizations can look at include permanent remote working, gig workers & campus hiring as well as greater focus on inclusivity and talent diversity,” the report said. 

 

“We believe that the fundamentals of the Indian economy remain strong and that there is a positive business sentiment. 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 percent and above. However, we do see some potential headwinds due to anticipated high inflationary pressures and the still-prevalent COVID-19 threat,” said Roopank Chaudhary, partner in Aon’s Human Capital Solutions in India.

Also Read: SEBI again goes soft on Chairperson & MD/CEO role segregation

Also Read: ABG Shipyard case: Did 2 independent directors know about the 'wrongdoings'?