India to see a 10.8% salary increase in 2016: Towers Watson

India is expected to see an overall projected salary increase of 10.8% as per Towers Watson 2015-16 Asia-Pacific Salary Budget Planning Report. It said that factoring inflation at 6.1%, the net salary increase in 2016 is expected to be marginally higher at 4.7% as against 4.5% last year, when the inflation was at 5.9%.

The report said that the projected higher overall salary increases are despite the fact that employers in the third quarter are less upbeat on the business outlook for India than they were in the first quarter. Those with a positive outlook shrank to 41% from 58%.

Sambhav Rakyan, Data Services practice leader, Asia Pacific at Towers Watson said, "Companies need to be smart about how they use limited salary budgets, because high volatility and talent crunches are causing frequent shifts to pay. Determining current pay rates for jobs in a highly competitive talent market is akin to shooting at a moving target."

The third quarter survey results show a similar trend to those of the first quarter in terms of higher increases going to top performers. The latest research shows that across employee levels, the 'top performers' get higher increases averaging 12.5%, while 'above average' and 'average' performers get 11% and 9.7% raises, respectively.

Salary budgets in the APAC region are set to rise 6.8% in 2016, slightly higher than 6.6% in 2015. But once inflation is factored in, average increases will be 3.4% next year, compared to 4.1% this year. In 17 of the 22 Asia Pacific markets covered by the survey, employees will go home with less money next year. Average inflation in 2016 is forecast to grow at 3.4%, up from 2.5% in 2015.

The 2015 Asia Pacific Salary Budget Planning Report is a bi-annual survey compiled by Towers Watson's Data Services Practice (TWDS). The survey was conducted in July 2015 and approximately 2,000 responses were received from companies across 22 markets countries in Asia Pacific.