New Delhi, February 26 2014 — Aon Hewitt, the global human resources solutions business of Aon plc (NYSE:AON), announced today the results of the 18th edition of Aon Hewitt’s Annual Salary Increase Survey in India. On the back of improving business confidence, positive expectations from the general elections, and moderating inflation, the survey results, represented by 565 firms, are projecting a 10% salary increase for 2014. This is marginally higher than the projections made in September 2013, but the lowest the country has seen in a decade (barring FY2009 when markets became extremely cautious post the global financial crisis).
Anandorup Ghose, Rewards Consulting Practice Leader at Aon Hewitt India, commented: “This period reflects the easing off of the unsustainable turbo-charged pre-crisis economic growth. Even though growth appears to be strengthening in both advanced and developing economies, it is expected to be muted and slower paced than in the pre-2008 era. This sentiment is reflected in India’s slightly higher salary increase projections for 2014.”
Sectors largely reliant on the domestic economy such as Pharmaceuticals, Chemicals, Engineering Services and Consumer Goods, are projecting the highest salary increases, typically above 10% for 2013-14. In these industries, compensation costs represent a smaller percentage of the total cost structure. However, the cautious streak is evident as projections for 2014 have reduced by an average of 30 basis points from the actual increases provided in 2013 by these industries.
Service industries like Retail, Financial Services, and Hospitality bring up the rear in salary increase projections, with these businesses impacted by the slowing down of the economy and consumer spending. In these industries, compensation costs are a significant portion of their total cost structure, thus managing salary costs has become an important element in their cost management strategy.
It is important to note that the dispersion between the highest paying and the lowest paying industries has narrowed in 2014 to about 2–3%, as compared to the 5–7% dispersion observed in 2013….Read More