According to the EY, ‘Forecast of Pay’ 2023 report estimates that the average wages in India will increase by 10.2% in 2023, slightly lower than the 10.4% (Actuals) recorded in FY’22, but still in the double digits. The speculated salary increases for 2023 are marginally lower than the real increases for 2022 for all job positions, apart from blue-collar workers who are projected to have a slight reduction in compensation in 2023.
The three industries expected to have the largest salary increases are linked to technology. E-commerce has the highest estimated salary expansion at 12.5%, followed by professional services at 11.9%, and information technology at 10.8%.
The labour market in India is exhibiting dynamic and rapid changes due to global economic forces, technological advancements, and shifting worker preferences. As the Indian economy progresses, the competition for top talent is rising in numerous industries. Those with key abilities and illustrations of high performance will likely be given a compensation premium of 1.7 to 2 times the average wage.
A few of the most promising sectors for employment in India in 2023 include renewable energy, e-commerce, digital services, healthcare, telecommunications, educational services, retail and logistics, and fintech.
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Commenting on the report, Abhishek Sen, Partner and Total Rewards Practice Leader at Workforce Advisory Services of EY India said, “The current talent market in India is dynamic and evolving rapidly, shaped by a combination of global economic trends, technological advancements, and changing workforce expectations. As the Indian economy continues to grow, competition for top talent is intensifying across various industries.
Top talent with critical skills and high-performance history command compensation premiums ranging from 1.7 to 2X of average talent.”
The demand for technology-related skills in areas such as AI, ML, and Cloud computing is high and is accompanied by a 15-20% wage increase compared to basic software engineering salaries. Additionally, analytical skills such as risk modelling, data architecture, and business analytics come with a 20-25% wage premium.
Organizations offer as much as 1.9 times more in pay for highly demanded skills compared to basic skills, and the average ratio of salary increase between average and high performing talent is 1:1.8. The overall variable pay-out as a percentage of total compensation was 15.6% in 2022 and 25.5% for financial institutions, while the telecommunications industry had 13.7%.
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