The increase is marginally higher than the average actual increase of 5.9% in 2020.
37% of the surveyed companies in India have projected a positive business revenue outlook for the next 12 months, up from 18% in Q3 of 2020, says the Salary Budget Planning Survey report by Willis Towers Watson. However, recruitment is yet to pick up, with only 10% of the organisations in India planning to add new headcount compared to 14% last quarter, according to a press release.
On average, 20.6% of the salary increase budget is being allocated to top performers, representing 10.3% of the employees in India.
“As companies in India respond to the economic implications of the Covid-19 crisis, there is an increased optimism on business recovery, but it is yet to translate into the salary increment budget. With compensation budgets lower than previous years, companies are likely to prioritise allocation towards protecting critical and high skilled talent,” said Rajul Mathur, consulting head – talent and rewards, Willis Towers Watson India.
High tech, pharmaceuticals and consumer products and retail project a median salary increase of 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%.
“Some sectors such as hospitality, aviation, travel and tourism were hit harder by the pandemic than the others. Sectors such as pharma, FMCG, e-commerce and high tech have experienced growth and this is reflective in their hiring plans and salary budgets for 2021,” said Arvind Usretay, director, rewards, Willis Towers Watson India.
The survey was conducted online in October/November 2020, receiving over 18,000 sets of responses covering over 130 countries worldwide. Around 300 companies were surveyed in India.