India to see 10% salary increase in 2017
Salaries are expected to rise by 10 percent in 2017, while star performers will attract much more as companies are discernibly prioritising such employees, says a report.
New Delhi: Salaries are expected to rise by 10 percent in 2017, while star performers will attract much more as companies are discernibly prioritising such employees, says a report.
According to the 2016 Salary Budget Planning (Q3) Report released by global advisory, broking and solutions company Willis Towers Watson, salaries in India are projected to rise 10 percent in 2017, same as the actual increase in 2016.
Once average inflation for India of 5.7 percent is taken into account, the projected increase in real terms for 2017 will be 4.3 percent, down by a fraction from 4.4 percent in 2016.
The report noted that with tighter salary increase budgets, organisations are prioritising their top performers.
Similar to trends in the Asia Pacific region, the report indicates that in India, 38 percent of the budget for salary increase goes to top performers. Another 34 percent is shared by above-average performers while the remaining 28 percent goes to average performers.
"The data clearly shows a greater emphasis on rewarding high performers rather than across-the-board increases for all workers. Without such differentiation, companies will face pressure in attracting and retaining talent, especially for in-demand areas," Sambhav Rakyan, Data Services Practice leader, Asia Pacific, at Willis Towers Watson said.
The report further noted that salaries were projected to rise 10.8 percent in 2016, but in reality rose just 10 percent - the second time below projected increases since 2015.
"If that pattern continues in 2017, Indian employees could see a single digit salary increase for the first time since 2011," the report said.
When compared to developed and key emerging markets in the region, India's 2017 projected salary rise is the highest.
Indonesia at 9 percent, Sri Lanka at 8.9 percent, China at 7 percent and Philippines at 6.4 percent are the other countries that make up the top five in this group.
Salaries in developed markets such as the US and UK are projected to increase around 3 percent.
The pharmaceutical sector continues to project higher salary increases as compared to most other sectors at 11 percent, while the financial sector will likely remain well below average at 8.5 percent.
The projected salary increase in the high tech sector for 2017 is likely to be the same as the previous year at 10 percent.
The 2016 Asia Pacific Salary Budget Planning Report is a bi-annual survey compiled by Willis Towers Watson's Data Services Practice. The survey was conducted in July 2016. Around 4,000 responses were received from companies across 22 markets in Asia Pacific.