In India, Salaries to Increase Nearly 10% in 2022
India is going to witness the highest salary hike of nearly 10% in the last 5 years. According to the 26th survey of leading global professional service firm Aon, all the organizations across the nation have projected around 9.9% to 10% hike of salaries in the year 2022.
The same was 9.3% in the year 2021 and this year the hike is taking place as the organizations are investing and planning to enforce new-age capabilities in order to build a strong workforce amid COVID-19. Ever since 2016, this is going to be the highest increment India could ever reach.
In this survey, the data of almost 1500 companies were analyzed spread across 40 sectors. Although this salary hike is only possible due to a high attrition rate of around 21% also known as the “Great Resignation of 2021” where a large number of employees left their jobs due to the ongoing pandemic. According to the study, the industries with the highest projected salaries will be e-commerce with 12.4%, life science, venture capital (professional services) with 10.9%, and Hitech/IT and IT-enabled services (ITeS) with 11.6%. Altogether 88% of the Indian organizations will undergo improvement in the terms of business in the year 2022, which is 11% higher than in 2021.
Nitin Sethi, Partner and CEO of Aon's Human Capital Solutions in India said,
“Salary increases should come as a welcome break for employees amidst a volatile period. For employers, it could emerge as a double-edged sword when you combine the rising cost of talent with record-high attrition numbers. This trend is fuelled by economic recovery and the need for organizations to invest in new-age capabilities to build a resilient workforce.”
Although India was very badly affected in the second and third wave of Covid, still the country will be projecting the highest salary increase among the BRIC, Brazil, Russia, India, and China, in the year 2022. These countries will witness the rise but with a small percentage, of 5% (Brazil), 6.1% (Russia), 6% (China). Although in the United States the employees will only be witnessing a hike of 3.6% along with 3% in the United Kingdom and Germany, which is altogether a very low percentage. In countries like Japan and Singapore, the hike will be only around 2.9% and 4%, respectively.
This rise in salaries in India will motivate the employees and increase the substantial rate of optimism in the ongoing business. As per the survey, in the year 2022, there will be a rise in double-digit increments. Roopank Chaudhary, a partner in Aon's Human Capital Solutions in India said,
“Even sectors that struggled during the first wave of the pandemic, such as retail, logistics and quick-service restaurants, have bounced back by focusing on modern trade/digital channels, which is reflected in salary increases of 8 percent and above.”
He also added,
"We do see some potential headwinds due to anticipated high inflationary pressures and the still-prevalent COVID-19 threat.”
As per the AON officials, the rise in the salaries is based mostly on the three factors, including, the high rate of attrition which has been witnessed since the pandemic, the opening of companies creating an optimistic outlook towards business, and companies giving out money in order to retain the best performers in the company.
Also, India with around 61400 recognized startups is in the row to become the third-largest startup ecosystem in the world after the US and China. Thus, this is also contributing to the hike in salaries, by creating more jobs. The survey also concluded that the increment of the salaries has been balanced by adopting the socialistic approach and balancing the salaries of top and average performers in the year 2021.