Enhancement of Salary Packages in 2021 by Majority of Indian Companies

"Throughout the past few years, many debates on pay increment in salaries have been held, and a greater responsibility is needed in this process of salary budgeting, as compensation cost ratios are increasingly becoming a sore point in boardrooms across the country." stated Anandorup Ghose, a partner at Deloitte India.

A recent survey by Aon- a leading global provider of risk management services, insurance and reinsurance brokerage, and human resource consulting and outsourcing- indicates that despite the hard decisions Indian companies made in second and third quarters of current year, 87 per cent of them are about to raise the salaries in 2021. It shoes still these companies are thinking highly of investing in talent. Moreover, 61 per cent out of 87 per cent of these companies may offer a 5-10 per cent raise in salary.

 Company leaders passed complicated situation during lock down and pandemic; yet they are struggling to improve consumers' demand. They believe in need to invest in talent as a critical part of their recovery and growth prospects. 

"Despite the gravity of the COVID-19 pandemic in India and its deep impact on the economy, organisations in India have shown tremendous resilience and a mature view on talent," said Nitin Sethi, the CEO of the firm's Performance and Rewards Solutions practice in India, as well as a partner at Aon, at the time of release of the survey.

As compared to the preceding year that 71 per cent of companies offered increases in salaries, this year majority of companies will gave a hike to the salaries ; however, in 2020 according to the "Salary Trends Survey" in India, only 45 per cent out of 71 per cent gave a raise on packages. In the other hand, Deloitte survey shows that average salary increment in India falls to 3.6% in 2020. This survey indicates that less than 10 percent companies have given a salary hike equal to or more than 10 per cent in 2020; the share of such companies has dropped extremely, as well.

A sum of 1050 companies from 20+ industries have been surveyed in order to gather and analyze all the data provided. Accordingly, high technology (Hi Tech), information technology (IT), IT Enabled Services (ITeS), life sciences, e-commerce, chemicals and professional services are among those industries which are going to provide the most enhancement in salaries. The same way, companies which had offered a very low raise in 2020, like hospitality, retail and real estate/infrastructure industries, are planning a higher raise in salaries for 2021, but it depends on many other circumstances.

Navneet Rattan, Director at Aon in India's Performance and Rewards Solutions practice, expressed that: "The impact of Covid-19 has been varied on different sectors and organisations. We see high differentials in salary increases -both intra and inter-industry. The difference between industries with highest increase to lowest increase hits 7.2 per cent points as compared to mere 2.4 per cent points in 2019."