Single or double digit salary hike?
Siddharth Tak and Ankita Chakrabarty/ ZRG
Will it or will it not be, is not under debate here. The question under debate is - would it be in the single digit or double digit range? No, the talk is not about inflation. It is about what you carry home as your salary every month.
The market is certain of a hike to come this April but you have to be lucky to be in a sector that rewards you with a double digit salary growth. For the rest it might be a case of being just happy with a less than 10 percent rise this fiscal.
While various Human Resource surveys present a contrasting picture on the quantum of the hike, there is not one report that suggests a negation of the hike.
According to the findings of the 16th annual ‘Salary Increase Survey’ by global human resource firm Aon Hewitt, the salary hike in India would be around 11.9 percent in next fiscal. Not far behind is the prediction of the IT workforce apex industry body – NASSCOM - that pegged the salary growth in the 8 to 10 percent range.
Supporting the Nasscom projections, Kris Lakshmikanth, CEO at Head Hunters India, an HR practices consulting firm, said, “As far as increment in salaries is concerned, it will be in single digit. The figure can’t be 11.9 percent. This figure is overestimated.”
It is not that Hewitt view does not have any endorsement. Outlining the salary hike profile in India, Chief Financial Officer (CFO) at online job portal Naukri.com Ambarish Raghuvanshi argued, “The average salary hike would be somewhere nearing to 10-15 percent.”
He, however, is keen to read the riot act to underperformers cautioning against any “generic all round hike”. “Salary disparity would indeed be there as good performers only would see a supernormal hike and not so good performers might not see a hike at all,” he warned.
“This year is a mixed bag in salary hike in India,” believes Shiv Agrawal, CEO, at ABC Consultants. He told Zee Research Group, “The signals are mixed both in the economy as well as in corporate sector. Therefore, people are going to be a little bit conservative. Good news is that increments would indeed be there. The average salary hike would be somewhere nearing to 8-12 percent”.
Getting into specifics, the salary hike quantum would indeed have a sharp sector profile. “Salary increments would probably be higher in the services sector because they are reasonably well positioned as there is still shortage of manpower,” added Raghuvanshi at Naukri.
According to the latest report released by Aon Hewitt, the pharmaceutical sector would be the maximum gainer with an estimated salary hike projection of 13.3 percent, followed by engineering design, infrastructure, and chemical sector with 13, 12.9 and 12.6 percent projection, respectively.
The report pegged the growth projection for engineering, manufacturing, FMCG and auto sector at about 12.4 percent a piece. High Tech, Information Technology, retail, energy (oil, gas, coal, power) and metal sectors are expected to give salary hike of about 11.3 percent to 11.9 percent respectively. The telecom and financial institutions have been projected to be in the lower bracket of salary hike at an estimated 11 percent and 10 percent respectively.
On sector projections, Lakshmikanth at Head Hunter said, “Power sector is the worst affected. People in the power sector are happy with the fact that they have a job; they can’t even dare to imagine an increment in their respective salaries.
Also, the telecom sector is one of the other sectors which is worst affected. New telecom companies have not been given any salary increments for the past two years and most of them are closing down and those which are existing would expect an increment somewhere nearing to 7-8 percent.”
He added, “Retail sector, garment sector and consumer electronics are also in the danger zone. However, luxury goods will see an increment ranging somewhere between 10-20 percent.”
Raghuvanshi at Naukri.com also projected poor increment for sectors such as banking, telecom and real estate. Agrawal at ABC Consultants admitted that the infrastructure and the financial sector too might suffer as these industries were not in right shape.