India To See 10% Salary Increase In 2020: Report
As the economy continues to falter, salaries in India are projected to rise 10 percent in 2020, according to the Salary Budget Planning Report released by Willis Towers Watson.
In 2019, the effective wage increase was 9.9 percent which is projected to touch 10 percent next year. While salary increases are stabilising around the 10 percent mark, they remain the highest in the Asia Pacific region, the report said.
Indonesia is projected at 8 percent, China at 6.5 percent, Philippines at 6 percent, Hong Kong and Singapore both at 4 percent.
"Though salary increases in India continue to be among the highest in the region, companies are taking a cautious approach and do not intend to make any significant changes from previous years," Willis Towers Watson India consulting leader (talent & rewards), Rajul Mathur, said.
Companies are beginning to make selective skill-based compensation adjustments to cater to requirements around automation and digitisation, he said.
It looks at a range of industry sectors and job grades, focusing on salary movement and review practices to assist companies with their compensation planning.
The survey said the median salary increase at the executive level for 2020 is projected at 10.1 percent, an increase from 9.6 percent in the previous year.
For middle management, professional and support staff, an increase from 10.1 percent in 2019 to 10.4 percent in 2020 is projected.
The employee group of production manual labor is also projected to receive a higher salary increase of 10.3 percent as compared to 10 percent last year.
"Attracting and retaining the right talent at leadership positions is commanding higher pay increases as the leadership pool continues to be limited. The increase is mostly in terms of variable pay as there is a greater focus on pay for performance," the company's director (rewards) Arvind Usretay said.
On salary increases by performance levels, the survey found that on an average, 25 percent of the salary increase budget is being allocated to top performers, which represents 11.5 percent of employees in the country.
This implies that for each Re 1 allocated to an average or below-average performer, Rs 2.16 is allocated to a top performer compared to about Rs 1.3 last year, the report said.
Of the surveyed companies, 28 percent have projected a positive business revenue outlook for the next 12 months, down from 37 percent in 2018.
Whereas, 61 percent expect no big change as compared to 57 percent last year; and, 11 percent have a downward revenue projection compared to 5 percent in 2018, it said.