India to see 10 pc salary rise in 2018

Although salaries in India are seeing a decreasing pattern in the year-on-year salary increases, its projected salary for 2018 is still the highest in the Asia Pacific region. Salaries in India are projected to rise 10 per cent in 2018, same as the actual increase in 2017, according to the Q3 2017 Salary Budget Planning Report released by Willis Towers Watson (NASDAQ:WLTW), the leading global advisory, broking and solutions company. The report looks at a range of job grades across various industry sectors.

 Indonesia is projected at 8.5 per cent, China at 7 per cent, The Philippines at 6 per cent, and Hong Kong and Singapore both at 4 per cent.

Sharing his perspective on the findings, Sambhav Rakyan, Data Services Practice Leader, Asia Pacific at Willis Towers Watson said, “India continues to show high salary increments compared to other countries in the Asia Pacific region. However, given the decreasing pattern in the annual salary increases, Indian employees could very well see a single-digit salary increase in 2018 for the first time since 2011.

“Progressive employers are beginning to leverage employee benefits as a strong lever in differentiating their employee value proposition and ensuring transparency in compensation and benefits related communication”. 

Drop in performance budget

Salary allocation for top performers in 2017 increased to 39 per cent up from last year’s 38 per cent. On the other hand, the budget set aside for average performance budgets decreased by one per cent to 27 per cent.

Arvind Usretay, Director, Rewards, Willis Towers Watson India, explained, “These changes are marginal, but as salary budgets get tighter, it still reflects the sentiment of employers to reward top performers. Therefore, now we see more companies relying on robust processes, governance and training at driving linkages between performance and pay.”

Managing salaries & how

The report highlights that executive salaries have plateaued and in some cases show a downward trend. However, in the mid-management level, the salary increase range is wide — from a two-three per cent for average performers to 15 per cent for top performers. The junior management salary increases will average around 10 per cent but may have a wider range. 

Better than the rest

The most notable projected salary increase is seen in the energy, FMCG and retail sectors. At 10.5 per cent, these sectors are expected to do better than the overall projected salary of 10 per cent. This is reflected in the focus on reforms in the renewable energy sector, and convergence in online and offline in the retail sector. 

A significant change in projected salaries is expected in the pharmaceutical sector (from 11 per cent in 2017 to 10.3 per cent projected for 2018). Notably, at 9.1 per cent the financial services is the only sector where the projected salary is less than the overall projection. 

The report also highlights that the top three functions companies are looking to recruit in the next 12 months are engineering, finance and marketing.