If last year's salary increases were an indication of a recovery from the slowdown, this year companies are expected to give bigger hikes to employees across almost all sectors, if compensation and human resource experts are to be believed.
What makes this year's increments interesting is that certain sectors that are not doing well have also designed ways to reward key talent. The underlying story of increments in 2011 is: jobs are back, so are robust pay raises, especially for key talent. TeamLease Services, a leading staffing firm, says hiring and business sentiment will remain positive in 2011. Sector-wise, telecom, infrastructure, fast-moving consumer goods, or FMCG, and manufacturing are likely to hire more than last year.
Banking, Financial Services and Insurance, clubbed as BFSI, will remain stable. The average increase in hiring will be 10-18 per cent across sectors. Information technology (IT) and IT-enabled services, which have a higher hiring base, will continue to hire the most.
|+ve: High Expectations From: IT, ITES, Infrastructure, Power and Energy, and FMCG|
-ve: Low Expectations From: Manufacturing, BFSI, Retail, Real Estate, and Health Care
Given this positive sentiment, increments will be in the range of 10-20 per cent compared with 7-10 per cent last year, depending on the sector, says Ashok Reddy, Managing Director, TeamLease.
The sectors that will do better in terms of increments are likely to be IT and ITES, infrastructure, FMCG and telecom, he says. Project managers in infrastructure can expect a hefty hike. Reddy sees manufacturing and retail forking out increments of around 15 per cent. BFSI hikes could be lower.
Y.V. Verma, Chief Operating Officer of LG India, a consumer durables company, has not yet finalised increments for his staff, but indicates that these will be slightly better than last year's. "On average, increments will be upwards of 15 per cent. Last year, they were around 12 per cent." Companies in the sector are hiring aggressively and will be aggressive about retaining manpower, he says.
Compensation experts such as Sunil Goel, Director of GlobalHunt, an executive search firm, are particularly upbeat about the energy sector and predict an average salary hike of close to 30 per cent for it. Reasons Goel, "There is a special focus on thermal and hydro projects for which several policies have been framed by the government. More and more private players are expected to enter this sector... the nuclear energy sector is also expected to create many jobs."
The New Year could be a mixed bag for the manufacturing sector, though. Tapan Mitra, Chief of HR at Apollo Tyres, points out that tyre industry sales are sluggish and that might get reflected in the increments. "The tyre market is not good and stocks have built up. Unless that improves soon, we will be conservative in the matter of increments," says Mitra. Last year, the company had handed out average increments of 15 per cent, which, Mitra says, may come down to 10-12 per cent.
The tyremaker, however, is restructuring its bonuses. "We are readying a long-term bonus plan for our key talent," says Mitra. That is hardly surprising given that the company has 20 per cent attrition in the field and 22 per cent among entry-level engineers.-Saumya Bhattacharya