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India Inc to shell out pre-Covid level hike to employees  

India Inc to shell out pre-Covid level hike to employees  

The projected hike is an increase from the actual hike of 8.8 per cent given out last year. Third wave or not, businesses continue to power through with a strong momentum in mindset and preparedness

Technology, e-commerce and IT-enabled services are top sectors for salary hike Technology, e-commerce and IT-enabled services are top sectors for salary hike

India Inc is likely to shell out an average salary hike of 9.4 per cent in 2022, bouncing back to pre-Covid levels and indicating a strong recovery, according to Aon’s 26th Annual Salary Increase Survey in India of 1,300 organisations across 39 industries.

The projected hike is an increase from the actual hike of 8.8 per cent given out last year. Third wave or not, businesses continue to power through with a strong momentum in mindset and preparedness, according to Aon’s observations accompanying the findings.

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

Further, the survey found that 98.9 per cent companies intend to increase employees’ salary in 2022 compared to 97.5 per cent a year before. The number of companies planning zero hikes has also reduced from 2.5 per cent of those surveyed to 1.1 per cent.

Meanwhile, a high attrition rate of 20 per cent and a voluntary attrition rate of 15.4 per cent indicate a renewed war for talent, the report found.

The pandemic has accelerated the digital journey for organisations. This has led to an unprecedented war for digital talent in the short term and is driving up salary increase budgets, attrition numbers across sectors. Businesses will have to redefine their talent strategies to keep pace with the war for talent, it said.

 “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 increases be sustainable in the long run,” said Nitin Sethi, partner and CEO of Aon’s performance and rewards businesses in India.

“It’s not surprising that the sectors seeing the highest attrition are also the ones seeing the highest play of technology, for instance, IT, e-commerce and financial institutions,” Roopank Chaudhary, partner in Aon’s human capital business, told BusinessToday.In.

He said professional services also saw a high attrition rate because there is a huge demand for audit, tax, compliance and legal services.  Quick Service Restaurants and regular restaurants had the highest attrition rate as people moved out to better performing sectors due to the pandemic. 

“As tech skills are at play here, we don’t see this as a one-year thing. It is going to have a longer-term play,” he said. 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, he said.

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Published on: Sep 07, 2021, 3:47 PM IST
Posted by: anwesha madhukalya, Sep 07, 2021, 3:37 PM IST