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Aon Hewitt Projects a 10.6% Salary Increase for India in 2015




Aon-Hewitt-LogoNew Delhi, India, February 20, 2015: Aon Hewitt, the global talent, retirement and health solutions business of Aon, today announced the 19th edition of its Annual Salary Increase Survey in India. The study, the largest of its kind in India, analysed data from more than 580 companies . The results reflect a positive yet cautious sentiment in India Inc. towards salary increases.


Anandorup Ghose, Rewards Consulting Practice Leader at Aon Hewitt India, commented: “On the back of

improving business confidence, a stable government and moderating inflation t here is a significant

improvement in business confidence across companies , however this confidences is not reflecting in

salaries. T he projected salary increase number shows a subtle improvement over salary increases i n the

last 3 years. Companies across industries are continuing to tak e a cautious stance and are not going for

aggressive pay increases .” Sectors such as Life Sciences, Engineering Services, Chemicals and Media

are projecting a higher increase than the market average. These industries have also consistently led the

salary increase numbers since 2012. The overall positive sentiment in the economy has impacted the

Real Estate & Infrastructure sector significantly. The sector has moved up many places to lead the salary

increase pack this year. Services industries like Retail, Financial Institutions, and Hospitality represent the

lower end of salary increase projections.


Other Emerging Trends from the Study


The survey highlighted that almost 70% of the respondents believe that there will be improvement in the

business outlook. About half of all companies feel that positive business sentiment and increasing pay

budgets in their competitive market are driving factors in their decision to increase salary projections from

earlier years.


With changing sentiments, employee expectations have also gone up manifold. The study results show

that organizations however are managing these higher expectations carefully and are not getting swayed

by it. The focus on performance differentiation is far higher with a larger proportion of budgets being

allocated to higher performers. Data this year shows that across the board top performers are expected

to get 1.6 times the salary increase awarded to a verage performers. This differentiation is even higher in

most service industries such as Banking and other Financial Services (BFSI), ITeS and Telecom as well

as other industries like Fast Moving Consumer Goods/Fast Moving Consumer Durables (FMCG/ FMCD),

Pharma etc.


Additionally, in the last five years, the percentage of employees with top performance rating has dropped

by close to 30%, implying that organizations are not hesitating to differentiate sharply on the basis of

performance and are allocating the share of the total increase budget accordingly.


Top/Senior Management will see approximately a fourth of their total compensation being variable and

even the bottom of the pyramid, at entry levels roles , more than 12% of compensation can be expected to

be paid through performance-linked pay. There is a steady trend towards greater performance -based pay

and it indicates a shift in overall pay philosophy across Indian companies.


Anandorup Ghose commented: “It’s heartening to see that even in good years India Inc. is showing

greater focus towards driving performance-based differentiation in pay budgets . T his will enable

companies to manage their compensation costs much better than they have been in the past. We are

also seeing an increase in overall employee benefits costs for companies ; there is a marginal but definite

shift in the level of benefits being offered to employees ”.


India Inc. attrition rates in 2014 continued to be broadly at par with 2013 at 18.1%, but key talent attrition

has witnessed a 31% jump. Key talent attrition in 2014 registered at 5.9% as compared to 4.5% in 2013.

Increasingly organisations are developing separate retention plans and policies for their top talent. While

rewards continues as a retention tool to ring fence top talent, programs around on leadership

opportunities and coaching, overseas assignments, fast track programs for hi – potentials are fast gaining

prominence.


With changing demographics and increased focus on employee wellness, benefits are gaining significant

momentum. Of the 500+ organisations that were surveyed, 76% of the firm has indicated an increase in

their benefits budget. Increase in salary linked benefits (retirals), introduction of new benefits and change

in the number of people availing benefits are some of the reasons for this increased budget.


© Technuter.com News Service




Aon Hewitt Projects a 10.6% Salary Increase for India in 2015

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