Only 19% employees in India anticipate up to 12% hike in salary

Last year, 78 percent of employees in India got a raise, with an average hike of 4-6 percent.

The appraisal season is upon us and a survey has found that nine in 10 employees in India expect a pay rise this year, with 19 percent anticipating their salaries to go up by 10-12 percent. Close to 20 percent of employees expect a 4-6 percent hike, a report by US-based ADP Research Institute has said.

The finding comes amid rising prices, job losses and a growing fear of a recession as the global situation remains uncertain. The collapse of some banks in the US, more than a year of the Russia-Ukraine war, which is showing no signs of abating, and other headwinds have only added to the worries.

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“Getting a pay rise has become increasingly important, particularly for those in lower- and middle-income brackets. With the rising cost of living, disposable incomes have been affected, and even higher earners are feeling the pressure,” said Rahul Goyal, Managing Director, ADP India.

Last year, 78 percent of employees in India got a raise, with an average hike of 4-6 percent. This year, even if there is an absence of a hike, a substantial 65 percent of employees want some form of merit bonus, paid holidays or travel compensation, the People at Work 2023 report says.

Globally, more than eight in 10 workers, or 83 percent, of employees anticipate their salaries to increase over the next 12 months, either by their existing employer or by moving jobs, the report says.

More than 32,000 workers across categories, including gig workers, were surveyed in 17 countries by the research institute, which claims to measure the world of work and gauge data to derive economic indicators.

Subdued expectations

Globally, on average, workers expect salaries to rise 8.3 percent but only a third of workers (34 percent) are expecting 10 percent or more, while only one in 10 (10 percent) expect more than a 15 percent jump.

Across industries, professional services workers and those in the IT and telecommunications sector have the highest rises in their sights at 8.7 percent on average.

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Those in leisure and hospitality anticipate the lowest (7.6 percent on average), as job losses and the mounting cost of living begin to tell on household budgets despite the easing of most COVID curbs.

The findings also come as workers in many countries are resorting to so-called industrial action or protests demanding better wages and work conditions.

More than four in 10 workers (44 percent) believe they’re underpaid. Demands for higher pay come after six in 10 workers (62 percent) were given a rise last year. The hikes averaged 6.4 percent. Given that the International Monetary Fund’s (IMF) global inflation forecast for 2022 was 8.8 percent, this amounts to a real-term pay cut.

“People are struggling to afford essentials and are unable to indulge in luxuries due to the financial constraints caused by increasing interest rates, higher rents, and food costs. Though inflation may have reached its peak, it appears that it will take a while for it to return to more manageable levels,” Goyal added.