Willis Towers Watson Survey finds

India to see higher salaries at 9.3% increase in 2022, up from 8% in 2021, Willis Towers Watson Survey finds

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 Willis Towers Watson Survey finds
Willis Towers Watson Survey finds

365telugu.com online news,New Delhi, 20th October 2021:Pay rises are making a comeback. Companies in India plan to give employees larger rises in 2022 as they recover from the economic fallout of the pandemic and face mounting challenges attracting and retaining employees. Salaries are projected to see a median salary increase of 9.3% next year (translating to an average salary increase of8.8%) as compared to the actual median salary increase of 8% (average salary increase of 7.4%) in 2021, according to the latest Salary Budget Planning Report by Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking and solutions company.

The report looks at a range of job grades across various industry sectors and is designed to provide companies with guidance for their annual salary forecasting for the year ahead.

Figure 1: Projected and actual salary increase (median):

 Willis Towers Watson Survey finds
Willis Towers Watson Survey finds
YearProjected salary increasesActual salary increases
20229.3%
20217.0%8.0%
202010.0%7.5%
201910.0%9.9%
201810.0%10.0%

As a large emerging market, India continues to project the highest salary increase for 2021 in the Asia Pacific region. Sri Lanka is projected to see an increase of 5.5%, China at 6.0%, Indonesia at 6.9%, and Singapore at 3.9%.

Figure 2: 2021 Q3 Asia Pacific: Media salary increase budget

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Economic outlook, hiring and attrition rates

Pointing towards a much-anticipatedeconomic recovery, a majority (52.2%)of companies in India have projected a positive business revenue outlook for the next 12 months, up from 37% in Q4-2020. This translates in increased hiringacross businesses with30% of companies planning to hire in the next 12 months. This is almost threetimes more than last year.

The survey also shows that a large part of hiring across sectors is likely to happenwithincritical functions such as engineering (57.5%), information technology (53.4%), technically skilled trades (34.2%), sales (37%) and finance (11.6%),and these jobs will command a high salary.

Willis Towers Watson Survey finds
Willis Towers Watson Survey finds

In addition, attrition rates in India, both voluntary and involuntary have been lower as compared to other countries in the region. The voluntary attrition rate was 8.9% and involuntary attrition rate was 3.3%.

Figure 3: Asia Pacific attrition rates

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Commenting on the findings, Rajul Mathur, Consulting Leader India, Talent and Rewards, Willis Towers Watsonsaid, “Increased business optimism is clearly translating into higher salary budgets and increased hiring activity. The pandemic was a watershed moment in the way organisations plan their people spend. While talent attraction and retention remain a challenge, the core employee value proposition will now need to go beyond just competitive salaries, and increasingly focus on a wider range of benefits, wellness, upskilling and the overall employee experience. This trend is likely to reshape the people spend and total rewards philosophy in India going forward”.

Sectoral trends in India

The high-techsector in expected to see the highest salary increase at 9.9% in 2022, followed by the consumer products and retail sector at 9.5%, and manufacturing at 9.30%.In terms of proportionate increase over last year, the high-techsector again tops with a projection of almost 1.9% increase from 2021.

Willis Towers Watson Survey finds
Willis Towers Watson Survey finds

“Covid-19 accelerated the digitalisation process across industries including automation and artificial intelligence. These developments, along with the high-tech sector’s early adoption of the remote working model has positively impacted the sector’s salary projections. The manufacturing and retail sectors saw rising demand driven by the easing of COVID-19 restrictions and a positive outlook of order inflows and consumer sentiment,” Mathur added.

On the other hand, the energy sector received amongst the lowest actual salary increase in 2021at 7.7%. The projected salary of the energy sector in 2022 is also the lowest at 7.9%. Mathur explained, “A combination of the prevailing macro-economic environment, typical business cycle and the lingering business impact from the pandemic have adversely affectedthe energy sector the most. That said, the salary increments for the renewable sector can be expected to be comparatively higher as India moves towards clean energy.”

Figure 4: Industry-wise budgeted salary increases trends

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Skills premium and variable pay

Employees can also expect a higher average variable pay at 15.7% this year for the 2020 performance year. In terms of employee segments, the middle management, professionals and support staff category gained the most proportionate increase on variable pay from 11.6% last year to 22.2% this year.Payout at the Executive level is expected tomarginally increaseto 27.9% from the actual increase of 26% last year.

Willis Towers Watson Survey finds
Willis Towers Watson Survey finds

Figure 5: Variable payout

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For top performers, the average salary increment budget allocation is 22.1%, whereas for average performers it stands at 43%. “With low salary increments last year, organisations have leaned towards a broader distribution of variable pay across employee segments by role, seniority and performance levels this year,” added Mathur.

Figure 6: Salary Increment Budget Allocation by Performance Rating

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