The median salary is projected to increase by 10% in India in 2023, according to the latest Salary Budget Planning Survey by global advisory, broking, and solutions company WTW. In 2022, the actual salary increase stood at 9.8%.
During the pre-pandemic year, the actual salary increase stood at 9.9% in 2019. However, the salary increase dipped in the pandemic years of 2020 and 2021 to 7.5% and 8.5%, respectively. The salary increase gained momentum in 2022. With this, the salary increase in India continues to be the highest across the APAC region.
China is projected to see 6% incerase in salary in 2023, Vietnam 8%, Indonesia 7%, Hong Kong 4% and Singapore 4%. The survey was conducted between October and November last year across 32,908 companies in 159 countries. In Asia, the survey was conducted across 1,985 organisations, including 700 in India in 27 markets.
'Unlike developed markets in the west, there appears to be the limited corresponding impact of inflation on salary budgets in India, which have historically been higher than CPI (consumer price index) based inflation," the survey says.
Across sectors, financial services, tech media and gaming, pharmaceutical and biotechnology, chemicals and retail are expected to see the highest salary increases at 10%. On the other hand, salary increases in the manufacturing of durable goods are projected at 9.5%; for non-durable goods at 9%, and for business process outsourcing (BPO) at 9.8%, which is expected to be below the industry median.
"Business opportunity and employee retention are currently the primary drivers for salary increases in India. Organisations will need to closely monitor economic indicators and the labour market while being flexible in planning their salary budgets. With a projected attrition rate as high as 24% for key talent segments, organisations need to look beyond pay increases and consider adjustments in their benefits, employee experience strategy, career paths, as well as work and stress management support they provide to their employees," says Rajul Mathur, consulting leader of work and rewards at WTW India.
In terms of business outlook, close to 80% of organisations feel they have similar or upward business revenue outlooks for the next 12 months, implying that overall business confidence remains high.
In terms of attrition, in 2022, India’s overall voluntary attrition rate remained high across sectors like technology, shared services and outsourcing (SSO) and financial services compared to 2020, as per the report. Earlier this week, another survey by consulting firm Mercer said Indian Inc will revert to pre-pandemic pay hikes which range from 9-9.5%.
