NEW DELHI: Indian corporates will likely offer an average salary hike of 7.7% to employees in 2021 but performers are projected to get 1.6 times more, the India Salary Increase Survey by global professional services firm Aon said on Tuesday.
This will be more than the 6.4% average hike paid by companies in 2020. Also, India Inc’s 2021 pay hike will be better than most global economies, including Japan, the US, China, Singapore, Germany and the UK where the average salary growth will be between 3.1% and 5.5%.
Among sectors in India, e-commerce and venture capital backed firms will give the best pay hike at 10.1%, followed by tech sector 9.7%, ITES at 8.8%, and entertainment and gaming at 8.1%. Chemicals and pharmaceutical firms are likely to offer an 8% pay hike this year, said the survey that collected data from over 1,200 Indian corporate houses. Similarly, professional services will likely give out a 7.9% pay hike and financial institution are expected to give an average salary increment of 6.5%.
Sectors which are still struggling to recover, like hospitality, infrastructure, retail, and engineering services, will be the laggards and offer increments between 5.5% and 5.8%.
The Aon salary survey showed that 93.5% organisations expect improved or stabilising business outlook and are quite positive on increments, while the percentage of organisations (6.5%) projecting a decline in outlook are still working towards retaining talent by offering close to market average increases. And almost 60% of the firms surveyed who said that business outlook is improving are expected to give an average 9.1% salary hike in 2021.
The survey said all the key sectors are going to offer higher salary hikes this year as business sentiment and outlook has improved and economy is looking to recover. While this may create more employment opportunities, it may also lead to increased attrition rate, which was subdued last year.
“The highest-paying sectors in 2021 continue to be the ones from last year like IT, life sciences, e-commerce and fast-moving consumer goods. Sectors that were adversely impacted by COVID-19, such as retail, hospitality and real estate, are projecting healthy increases in the range of 5-6%. Such numbers reflect their intent to stay relevant and to control attrition, which had increased for these industries last year,” said Roopank Chaudhary, partner in Aon’s human capital business in India.