The AON Salary Increase survey, however, said that India topped the list among the Asia Pacific region.
Indian employees could see the lowest salary increase in a decade, with a 9.1 percent hike in 2020. As per the Aon Salary Increase Survey 2020, the salary hike in 2020 is among the lowest figure since 2009 (at 6.6 percent).
On a year-on-year (YoY) basis, the projected hike is down 20 basis points from 9.3 percent in 2019. The survey, however, said that India topped the list among the Asia Pacific region.
This study analysed data across 1,000 plus companies from more than 20 industries. It said that despite the dip in the projections, two out of five participating companies in the survey were projecting a double-digit increase, expecting a positive economic outlook.
The survey said that 30 percent organisations in India were projecting double-digit increase in salaries. Among the sectors, professional services and e-commerce/early stage firms are expected to see a higher-than-average hike of 10 percent.
Tzeitel Fernandes, Partner, Rewards Solutions, Aon, “Despite economic challenges in 2019, organizations in India are taking a positive view. Pay increases in India continue to be the highest in the region. A big reason for India’s higher salary increase, as compared to other growing economies, is the high inflation rate and the war for key talent and niche skills.”
With respect to individual sectors, the automotive/vehicle manufacturing industry reported the biggest drop (from 10.1 percent in 2018 to 8.3 percent for 2020) in the salary hike projection.
Navneet Rattan, Director - Organization, Performance and Rewards, Aon India, has said that there is a reduction in the differences between pay increases across industries, with 85 percent of the organizations projecting between 7 percent to 11 percent. This, according to him, is a sign of maturing business ecosystems.
When it comes to the compensation structure, the quantum of variable pay or performance-based compensation is also on the rise. It rose to 16.1 percent in 2019 compared to 15.2 percent in 2018.Attrition also rose to 16.1 percent in 2019 compared to 15.8 percent in 2018 despite a tough economic situation. This could also be an indicator that top performers are able to get alternative employment opportunities easily.