Salaries in India are projected to rise 10% in 2019, same as the actual increase in 2018, according to the latest Q3 2018 Salary Budget Planning Report released by Willis Towers Watson, the global advisory, broking and solutions company.
While salary increases in India are stabilising around the 10% mark, they remain the highest in the Asia Pacific region. The report projects salary increase for Indonesia at 8.3%, China at 6.9%, The Philippines at 6%, and Hong Kong and Singapore both at 4%.
Sambhav Rakyan, Data Services Practice Leader, Asia Pacific, Willis Towers Watson said, “India continues to show high salary increments compared to other countries in the region and this can be attributed to the steady economic growth, progressive reforms and cautious optimism across sectors. However, workplace automation, artificial intelligence and robotics are expected to reshape a new combination of work, talent, skills requirements and work relationships. Organisations, therefore, should re-examine not just their talent strategies but also how they will remunerate and reward the workforce of the future”.
Commenting on how Indian companies are likely to approach salary increases as compared to MNCs, Rakyan added, “MNCs that typically have KPO/BPO or manufacturing operations in India will likely see average salary increases around the 10% mark, as in dollar terms this is not a significant increase to their cost of operations. However, Indian companies will likely see a lower salary increase which is more directly linked to their financial performance”.
The report identifies technical skilled trade (48%), engineering (45%), IT (39%) and marketing (15%) as the top four areas for recruiting critical functions in the next 12 months.
Median salary increase for 2019 at Executive level is projected at 9.8%, a marginal drop from 9.7% in the previous year, and at 10% for mid-management and production/manual labour, a drop from 10.1%, the report said.
Among sectors, the pharmaceuticals sector has the highest projected salary increase for 2019 at 10.3%. The salaries for consumer products and retail sector will remain consistent at 10% owing to the green shoots of recovery in the sector’s performance, increasing consumer confidence and purchasing power, according to the report. The financial services sector, mainly comprising Banks, NBFCs and Insurance companies, has seen a steady increase from 9.1% in 2017 to 9.6% for 2019, largely due to improved performance, higher premium collections for insurance companies and regulatory reforms.