Employees to see 12% salary hike next fiscal: Survey
Indian companies are expected to dole out an average salary hike of 12 percent in the next one year, while laying more emphasis on performance-linked pay packets, says a survey by global consultancy Mercer.
New Delhi: Indian companies are expected to dole out an average salary hike of 12 percent in the next one year, while laying more emphasis on performance-linked pay packets, says a survey by global consultancy Mercer.
While the projected average pay hike for 2013-14 fiscal is unchanged from the last two financial years, a decline has been witnessed in hiring intentions of companies for the next one year, the report said.
'2013 Total Remuneration Survey -- All Industries' released today has projected an average salary increase of 12 per cent across industries in the next fiscal.
"Overall average salary increase would be around 12 percent in 2013-14 period," Mercer India's Director (Information Product Solutions) Muninder Anand said here.
Pharmaceutical sector expects to see the highest pay hike at 12.5 percent.
"While companies continue to budget for double digit increments, there appears to be a strong sentiment to contain costs leading to companies re-evaluating their budgets," the report said.
The findings are based on a survey of 734 organisations across diverse sectors.
As per the report, organisations would be giving a hike of four per cent as promotion increase and three per cent as "market adjustment or correction, at median".
However, the survey found that only 72 percent of companies have plans to hire people in the next financial year whereas the same was at a high of 84 percent during 2012-13 period.
"Performance based pay and rewards will gain prominence in the appraisal cycle. Hiring will still continue to be on the agenda for most companies in 2013," Anand told reporters.
Meanwhile, the variable bonus payout -- as percentage of annual guaranteed cash salary -- is projected to be around 19.30 percent for 2012-13 fiscal. During this period, the variable pay is expected to be 25.70 percent and 23.50 percent for hi-tech and pharmaceutical sectors, respectively.
In the current business environment, Anand said that companies are increasingly moving employee remuneration away from a fixed-pay approach to one that relies more on variable compensation.
"Corporate sentiment is cautiously positive, though companies are adopting a wait-and-see policy. Our research suggests that companies are not looking at holding back increments in 2012, but are likely to be more selective," Anand said.
Meanwhile, average attrition rate touched 10.1 percent in the first six months of current financial year, while the rate of retrenchment of staff during the same period stood at 2.2 percent.
Mercer provides consulting in the areas of talent, health, retirement and investments.