Indian employees are expected to receive an average annual salary hike of 9.5% this year, a report published by HR Consultancy firm Aon Hewitt claims.
While the average hike is lower than last year’s average of 10.2%, the report claims that top performers will get much larger hikes, as companies seek to retain talent and reward performance.
The drop in salary hikes comes at a time when the Indian IT sector faces uncertainty, mostly owing to global economic developments, anticipation of rate cuts by the US Federal Reserve, and the Trump administration taking charge in the United States and coming down heavily on H1B Visas.
The Indian IT industry is currently valued at over USD 1 Billion, with IT exports being a major revenue source. The average salary hike for Indian employees has seen a consistent downswing, reducing by almost 6 percent over the last 8 years – average salary hikes have reduced from 15% in 2007 to 9.5% in 2017.
The Aon Hewitt Survey sourced data from over 1000 companies across sectors and observes that this year’s average isn’t all that bad, especially in the midst of sweeping foreign policy changes being contemplated by the US government, the Indian government’s demonetisation move, and most importantly, Brexit.
A rather evident reason to rejoice is that top performers, especially in the services industry, are expected to receive impressive hikes, as companies have begun to lay emphasis on rewarding talent, skill, and experience. Top performing employees are already drawing salaries that are 1.5%-1.8% higher than average performers. Retaining talent and reducing attrition have been key areas of focus for many leading market players.
Another development that calls for celebration is that India leads the Asia-Pacific region as far as average annual salary hikes are concerned. Other emerging and developed economies such as China, Singapore, Japan, Malaysia and Philippines are expected to witness average hikes of 6.9%, 4.1%, 2.4%, 5.5% and 6% respectively – much lower than the average annual hike in India.