SALARY HIKE IN INDIA - 2018
Indian economy has been strengthening over past years as a result of various structural reforms and the macro-economic policies that emphasize stability and efforts to tackle supply-side bottlenecks. Going forward this would further improve because of reforms in health/ education and encouraging private/ public investment which will enable India to move toward the income levels of wealthier countries.
Average Increment Increase 2018- 10.0%
Pharma 11.0%, FMCG 11.0% Insurance 10.5%, Durable 10.5%, Chemical 10.3%,
Automobile 10.3%, Retail 10.3% ,IT / ITES 10.2% , Engineering 10.0%, Manufacturing 10.0%
Telecom 9.4%, Real Estate/Infra 9.3% , Core 9.0% , Banking & Financial 8.7% ,
The rollout of the GST last year was a landmark accomplishment that can be expected to enhance the efficiency of intra-Indian movement of goods and services, create a common national market, enhance tax buoyancy, and boost
GDP growth and job creation. However the complexities associated with GST implementation has resulted in short-term disruptions; the economy now seems to be on its way to recovering from those disruptions.
India is on track and is expected to be one of the top three economic powers of the world over the next 10~15 years, backed by its strong democracy and partnerships. India’s GDP increased 7.1 percent in 2016~17 and envisaged growth rate of 7.4 percent for 2018~19 which will help the country to regain the tag of fastest growing economy title.
Government reforms and economic headwinds have a great impact on overall business performance which directly affects the company’s increment budget. At Omam Consultants, we reiterate that in the Indian industry, increment trend is predominantly dependent on factors such as - current business scenario, profitability, paying ability, culture and industry benchmarks.
Average Projected Salary Increase 2018
At Omam Consultants, we have been working on the increment trends of different industry verticals and the trend this year again reflects similar pattern in terms of salary increases percentage with higher emphasis on productivity and performance.
As per the recent cross industry salary hike study conducted at Omam, the projected salary increase for India is around 10 percent (Average). Hence, the employees in India are expected to get an overall average salary increase of 10 percent which is almost similar to the previous year actual increase of 10.1 percent.
Among the industries covered under the study, Core, Retail and Engineering sectors shows notable increase in salary hike percentage when compared to the previous year, which is the upshot of various reforms in renewable energy and emergence of total retail concept through merging of online & offline in retail.
Pharmaceutical sector still maintains the top position along-with FMCG in terms of highest salary increase of 11 percent. However, the projected salary hike for Pharmaceutical is little lower compared to previous year, while FMCG sector maintains similar increase percentage.
Automobile, Retail, Insurance, Durable, Engineering and Chemicals are likely to offer above average salary increases. Next in line are Start-ups and smaller MNCs which are also likely to offer above average salary increases to attract and retain key talent.
Banking & Financial Services and Real Estate/ Infrastructure sector is expected to offer lowest salary increase of 8.7 percent and 9 percent respectively. Core and Telecom are the other sectors likely to remain well below average of 10 percent; while IT/ ITES and Manufacturing sectors are likely to remain at the industry average of 10 percent.
With tighter salary budgets and shortage of skilled manpower, the trend of investing in key talent continues. Employers are tending towards rewarding their top performers with more and more companies shifting to a compensation structure based on the performance in lieu of annual merit increase.
Hence, the formal incentive plans come in focus to help employees know what they need to do in order to get targeted incentive payout. The concept of Variable Pay is not new in India and is getting a more matured and greater acceptability now by employees and employers but the traditional industries are still trying to catch-up on this concept & to bring in performance based culture in the Organization.
Sectors with projected increase @ average & above
Pharma 11.0%, FMCG 11.0%, Automobile 10.5%, Retail 10.5%,
Insurance 10.3% , Durable 10.3%, Engineering 10.3%,
Chemical 10.2%, IT / ITES 10.0% , Manufacturing 10.0%
Sectors with projected increase below average
Core 9.4% , Telecom 9.3%, Real Estate/ Infra 9.0%,
Banking & Financial Services 8.7%
Going forward, continuous performance management along-with structured development strategy to improve knowledge and skills will help enhancement of employee motivation & moral.
Courtesy Omam Consultants
