Good news for employees! Indian companies estimated to give 9.4% average salary increment in 2022, finds survey
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Good news for employees! Indian companies estimated to give 9.4% average salary increment in 2022, finds survey

By Jessica

New Delhi: Notwithstanding the COVID-19 second wave hitting the nation hard, Indian organisations have displayed resilience, and the salary increment is being projected to grow from an average of 8.8 per cent this year to an estimated average of 9.4 per cent in 2022, according to a survey.

According to the Aon’s 26th Annual Salary Increase Survey released on Tuesday, most businesses have an optimistic view going into 2022, with 98.9 per cent of companies intend to give salary increases in 2022, as compared to 97.5 per cent companies in 2021.

There is positive sentiment across most sectors, and India Inc is firmly on the path to recovery, with most firms projecting salary hikes back to FY 2019 levels by FY 2022.

“This is a strong indication of financial health and buoyancy in the economy. There is a clear uptick, from 6.1 salary increase in 2020, we have gone up to 8.8 per cent actual in 2021 and the projected salary increase for 2022 is 9.4 per cent, which is at par with the pandemic number that we had seen in 2018 and 2019,” said Roopank Chaudhary, a partner in Aon’s human capital business.

The survey further noted that the pandemic has accelerated the digital journey for organisations and this has led to an unprecedented war for digital talent in the short term and is driving up salary increase budgets and attrition numbers across sectors.

Businesses will have to redefine their talent strategies to keep pace with the war for talent, Chaudhary said.

Chaudhary further noted that most Indian organisations, across traditional and non-traditional sectors, are making investments in digital capabilities to sustain the growth momentum and disrupt their industries.

“Employees with digital and technological skills are the most successful in 2021, as we see the highest salary increase for employees with these skills across sectors. We expect that this trend will intensify over time, as organisations have an increased need for this talent to transform their business models and build resilient workforces,” Chaudhary said.

According to Nitin Sethi, partner and CEO of Aon’s performance and rewards businesses in India, while 2021 is a year where certain sectors remain under stress due to the COVID-19 pandemic, most businesses have an optimistic view going into 2022 and are projecting higher salary increases.

“We see positive sentiment across most sectors, high investor confidence with sustained foreign direct investment flowing into the country and growing consumer demand across most segments,” Sethi said.

The top three sectors with the highest salary increase projected for 2022 for India are technology, e-commerce and IT-enabled services.

“Sectors such as Hi-Tech/Information Technology, E-Commerce and Professional Services have projected greater than 10 per cent,” the study that analysed data from 1,300 companies in 39 industries said.

The sectors with the lowest salary increase projected for 2022 are hospitality, engineering services and energy.

While salary increments indicate strong recovery, attrition has shot up to 20 per cent, driven by buoyancy and demand and highlights a renewed war for talent.

“High double-digit attrition is the strongest we have seen in more than a decade. The war for talent is back in India, which we anticipate will keep salary increases high. The question for corporate India is, will this level of increase be sustainable in the long run” Sethi said.

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