Salaries of employees in India are not expected to be increased by more than 9.1 per cent in the current financial year, the lowest in the decade, according to a study by Aon.
The drop, however, is not very significant when compared to the hike in 2019, which was at 9.3 per cent.
It has been falling post the year 2011 when the average salary increase was at 12.6 per cent.
Tzeitel Fernandes, Partner, Rewards Solutions at Aon, said that the expected drop is cautionary as the GDP projection for 2020 has been reduced and consumer sentiments have been weak. She also stressed that there is a ‘general air of caution’ considering the current economic parameters.
Not all Indian industries will witness an improvement in salary beyond 9.1 per cent. However, nearly 39 per cent of them are still proposing to increase the employee salaries by double-digits, while 42 per cent of are staring at 8 per cent to 10 per cent hike.
Fernandes also stated that the companies are still hopeful that salaries will increase on a larger scale as the inflation rate is raised, and there is a war for crucial talents.
E-commerce firms are expected to offer the highest average pay raise by up to 10 per cent in 2020.
This is accompanied by Pharmaceutical/Medical companies, which are expected to enhance salaries by 9.9 per cent. Furthermore, salaries of employees with Hi-Tech/Information Technology firms, FMCG companies, ITeS, Engineering and Manufacturing, and Chemicals industry will witness growth between 9 per cent to 10 per cent.
However, amid the ongoing slowdown, the automotive sector is anticipated to witness the most significant drop in the past two years as the salaries for those working in this sector will only improve by 8.3 per cent as against 10.1 per cent hike in 2018.
Meanwhile, the variations in pay have been decreasing among various sectors and businesses are expected to witness mature business ecosystems, said Navneet Rattan, Director, Organization, Performance and Rewards, Aon India.
Also Read: 45% Workforce Earns Less Than Rs 10,000 Per Month: Labour Force Survey
