Salaries are likely to increase by 10.5 percent across levels and industries this year mainly due to optimistic economic outlook, a survey has said.
Mumbai: Salaries are likely to increase by 10.5 percent across levels and industries this year mainly due to optimistic economic outlook, a survey has said.
"Organisations are expecting to increase base salaries by 10.5 percent across industries and career levels in 2016," according to Mercer's 'All Industries Total Remuneration Survey', released today.
The salary increase forecast for 2016 is quite similar to the actual salary increase for 2015.
Among the industries surveyed, the projected salary increase ranges from 10-11 percent overall, with relatively higher increases for Life sciences, IT and Chemical industries.
Over the years, salary increase differentiation across industries has narrowed down but there is considerable pressure on talent retention as budgets remain tight, it added.
"The current pay increase points toward an optimistic economic outlook driving positive sentiment, with companies expecting to increase their headcount. The salary forecasts are the lowest for Consumer, Auto and Shared Services, seeing a dip in salary projections for 2016. Firms in India are
assertive of their growth plans and will continue to hire, especially engineers and computer science experts," Mercer Principal and India TRS Product Leader Ruchika Pal said.
The survey revealed that 48 percent of these companies are expecting to increase their head count.
In 2016, one in two companies are planning to increase head count with Hi-tech, Shared Services and Life sciences leading the pack.
The comprehensive survey represents 691 organisations across various industry sectors.
The report further reveal that there is an increase in variable bonus pay across industries, from the actual payout of 14.7 percent in 2014 to a projection of 15.4 percent in 2015, indicating that business performance in 2015 is better than in the previous financial year.
Variable bonuses paid out in 2014 were the highest in the hi-tech space, at 22.4 percent of annual guaranteed cash.
This was followed by the consumer sector at 15.5 percent.
It also showed that from a retention standpoint, sales professional across levels continue to challenge organisations.
While hiring, organisations find it hard to attract Research and Development (R&D) professionals as well as engineering professionals.
The research ecosystem in the country presents a significant opportunity for multinational corporations due to the intellectual capital available in the country.
Teams of Indian engineers working across the globe highlights the highly trained manpower available at competitive costs, the report said.