There is great news for the salaried class of the country at the beginning of the new financial year. Human resources consultancy firm Aon has predicted a 9.7 percent average salary hike to corporate employees in the country. The salary hike for top performers will be 15.6 percent as most companies have started giving productivity more value than the hours spend at work. “Pay increases are marginally positive, compared to earlier years. A big highlight is the reducing difference in pay increases across industries year-on-year. A lot of the pay increase decline is also reflected in the constant drop in voluntary attrition levels across industries,” said Anandorup Ghose, partner and head, emerging markets, Aon.
The consultancy conducted its survey in 1,000 firms of various industries. As per the findings of annual salary increase survey, the hike grew from 9.3 percent in 2017 to 9.5 percent and 2018 and is expected to grow by 9.7 percent in 2019. There are some sectors like Consumer Internet Companies (11.1 per cent), Professional Services (11.1 per cent), Life Sciences (10.1 per cent), Automotive (10.1 per cent), and Consumer Products (10.1 per cent) where salary hike is expected to grow in double digits. “Every election year presents a set of interesting dynamics in how companies plan and execute on budgets. We expect this year to be no different. But we are fairly confident that the double-digit pay increase days are well behind us, as India Inc shows maturity in managing economic and political cycles,” added Ghose.
Earlier, in a report by management consulting front Korn Ferry, salaries in the country are expected to increase in double-digits in 2019. The salary increase in the country for the year 2019 will be 10 percent in comparison to 9 percent last year. The inflation-adjusted wage growth will be 5 percent compared to 4.7 percent in the previous year.The inflation-adjusted wage growth in India is forecasted to increase by 0.3 percent compared to last year while for China it will go down by 1 percent, from 4.2 percent last year to 3.2 percent this year.
The wage growth reflects the macroeconomic condition of both countries. India, on one hand, is the fastest growing major economy in the world while China on other hand is crumbling under its own ambitions. Economic growth in China is slowing down, public as well private companies have started defaulting on corporate bonds and stimulus offered by the government of China is failing to to fuel the recovery.
The last four and a half years of the Modi government has been best for the salaried middle class in the recent past. The economic policies of the Modi government fueled the economic boom in India even at a time when the global environment was not conducive. Structural reforms like the Insolvency and Bankruptcy Code (IBC) and GST implementation are expected to further improve the macroeconomic conditions in upcoming years. The salaried middle class has been a major beneficiary of policies of the Modi government and this burgeoning middle class will sustain the economic development of the country for long period.
