According to the 2016 Salary Budget Planning (Q3) Report released by leading global advisory, broking and solutions company Willis Towers Watson, salaries in India are estimated to rise 10% in 2017, same as the actual increase in 2016.
When compared to key emerging markets in Asia, India’s 2017 projected salary increases are the highest. Indonesia’s 9%, Sri Lanka’s 8.9%, China’s 7% and Philippines’ 6.4% respective increases form the rest of top 5. Salaries in developed countries such as the US and the UK are expected to increase in the range of 3%.
The rise in 2016 fell eight tenths below the projected 10.8% – marking the second time the increase has fallen below projections since 2015. If the trend continues in 2017, Indian employees could see a single digit salary increase for the first time since 2011.
The report looks at a variety of occupations across various industry sectors. The industries that were covered include technology, financial services, health sciences, chemical, energy and natural resources, media, retail, construction and engineering, transportation and consumer goods.
The Willis Towers Watson report also shows that with tighter salary increase budgets, organisations strictly prioritise their top performers. Similar to trends in the Asia Pacific region, the report indicates that in India, 38% of the budget for salary increases goes to the top performers. Another 34% is shared by above average performers while the remaining 28% of the budget goes to average performers.
Sambhav Rakyan, data services practice leader, Asia Pacific, Willis Towers Watson, said, “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. Employers have to think beyond inflation-linking and look at more nuanced factors such as affordability, growth expectations, both employee and company performance, and specific talent and skills needs.”
He added that as the available budget shrinks, companies need to be smarter about how they use them to retain talent. “It’s important to prioritise the best performers and also to review how employees are rewarded with other incentives, such as more attractive benefits,” he said.
Willis Towers Watson states that organisations need to reassess whether annual salary increases are the best way to reward employees. There may be alternatives worth considering to better meet their needs and reflect their contribution.
Highlighting the need for increased transparency in communicating pay, Rakyan said, “Companies need to be transparent about communicating the rationale behind salary increases and performance benchmarking. In our experience, employees appreciate this.”
The 2016 Asia Pacific Salary Budget Planning Report is a bi-annual survey compiled by Willis Towers Watson’s Data Services Practice. The survey, timed to coincide with companies’ compensation planning for 2017, looks at a range of industry sectors and job grades from factory shop floor to executive suite, and focuses on salary movement and review practices.
