Indian Inc is expected to resume to pre-pandemic pay hikes which range from 9-9.5%, according to a survey by consulting firm Mercer.
The Report published the FORTUNE says that, After having grappled with the impact of the Covid-19 pandemic, cost deferrals and reduction measures to ensure business continuity, India Inc’s focus shifted firmly to the growth path in calendar year 2022 and this trend is expected to continue, says Mercer’s Total Remuneration Survey.
The survey overwhelmingly confirms that organisations across the board continue to revert to pre-pandemic salary increases which range from 9-9.5% says Mansee Singhal, senior principal, Rewards Consulting Leader India.
Some sectors, however, have decreased the forecast to 7-8% in line with the organisation’s performance and sustenance pressure, Singhal says.
The survey revealed that most industries including manufacturing, consumer and retail, chemicals and automobiles reverted to pre-pandemic levels of investment in rewards and incentives after a brief dip in 2020.
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Some industries were able to adapt and even thrive during the pandemic and post pandemic in India. Consequently, the salary increases in sectors such as technology, healthcare, services and global capability centres were better than expected, as they were buoyed by tailwinds, such as the accelerated shift towards digitalisation, increased demand for healthcare products and services and subsequent emergence of medical tourism, India’s large talent pool and relative cost advantages in light of global geo-political shifts, etc.
“With the global inflation and recessionary headwinds, India Inc. while being broadly insulated, is experiencing layoffs in select sectors. So it is time for cautious optimism, accelerated domain and performance-based differentiation and reviewing of benefits for maximizing returns on investments,” Singhal adds.
In 2022, India Inc. witnessed a growing trend of companies moving towards performance-based compensation packages for senior executives through higher variable pay and using performance stock units (PSUs), which help in tighter stakeholder linkage to executive rewards.
Global MNCs operating in India have a standardised rewards strategy with a higher focus on monetary rewards and performance-based incentives, pay positioning is mostly at median, and pay ranges are narrow with low overlaps. Indian headquartered firms, on the other hand, have positioning based on levels, functional or skill differentiation and pay range spread of up to 200%.
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