Did somebody say pay hike?
Hewitt Associates, a human resources consulting company, which recently projected such a hike in its 13th annual Salary Increase Survey, has now sounded a cautious note.
What’s behind Hewitt prediction of 8 per cent increment in 2009.
An average salary increase of 8.2 per cent in 2009. If this sounds too good to be true in times of job losses—it probably is. Hewitt Associates, a human resources consulting company, which recently projected such a hike in its 13th annual Salary Increase Survey, has now sounded a cautious note.
According to Sandeep Chaudhary, leader of Hewitt’s performance and rewards consulting practice in India: “The projection of 8.2 per cent will get depressed by 1 to 2 per cent in the next 3-6 months.” But even the rather optimistic figure of 8.2 per cent means that the slowdown-hit India Inc. will see a 5 per cent drop in hikes, on average, compared to last year. “This is due to the fact that organisations are in a wait-and- watch mode because of a lack of clarity about their business performance. There is a difference between what is budgeted for in terms of salary increase and the actual salary increase handed out to the employees,” says Chaudhary.
These projections could weaken further if employment and salary projections for the real estate sector are taken into account. Real estate, which according to the Hewitt survey posted a 25.2 per cent average increase in salaries in 2007 and a 25 per cent projected hike in 2008, was not part of the 2009 survey. The survey, conducted between December 2008 and January 2009 among 480 organisations across 20 industries, shows that less than 1 per cent of the organisations were considering salary cuts for all employees. But this too has a caveat.
Chaudhury admits that “there are more organisations looking at salary cuts for at least some of their employees.” Typically, this will impact top-level executives. “Today, more companies are looking at freezing salaries rather than increments. Even assuming there are going to be hikes, they would at best beat inflation figures, which will be sub-5 per cent,” says E. Balaji, CEO, Ma Foi Management Consultants.
— Saumya Bhattacharya
An average salary increase of 8.2 per cent in 2009. If this sounds too good to be true in times of job losses—it probably is. Hewitt Associates, a human resources consulting company, which recently projected such a hike in its 13th annual Salary Increase Survey, has now sounded a cautious note.
According to Sandeep Chaudhary, leader of Hewitt’s performance and rewards consulting practice in India: “The projection of 8.2 per cent will get depressed by 1 to 2 per cent in the next 3-6 months.” But even the rather optimistic figure of 8.2 per cent means that the slowdown-hit India Inc. will see a 5 per cent drop in hikes, on average, compared to last year. “This is due to the fact that organisations are in a wait-and- watch mode because of a lack of clarity about their business performance. There is a difference between what is budgeted for in terms of salary increase and the actual salary increase handed out to the employees,” says Chaudhary.
These projections could weaken further if employment and salary projections for the real estate sector are taken into account. Real estate, which according to the Hewitt survey posted a 25.2 per cent average increase in salaries in 2007 and a 25 per cent projected hike in 2008, was not part of the 2009 survey. The survey, conducted between December 2008 and January 2009 among 480 organisations across 20 industries, shows that less than 1 per cent of the organisations were considering salary cuts for all employees. But this too has a caveat.
Chaudhury admits that “there are more organisations looking at salary cuts for at least some of their employees.” Typically, this will impact top-level executives. “Today, more companies are looking at freezing salaries rather than increments. Even assuming there are going to be hikes, they would at best beat inflation figures, which will be sub-5 per cent,” says E. Balaji, CEO, Ma Foi Management Consultants.
— Saumya Bhattacharya
