Indian increments to range between 9.7%-13.4% in 2004

The feel-good factor is set to translate into hard cash. Salary increments handed out by India Inc in 2004, without taking inflation into account, will range between 9.7 per cent and 13.4 per cent, according to a survey carried out by Hewitt Associates (India), the HR outsourcing and management consultancy outfit.

Adjusting these numbers for the 4-4.5 per cent inflation projected by the Reserve Bank of India for 2003-04, the real salary hikes could range from 5.2 per cent to 9.4 per cent.

Hewitt also announced yesterday that 2003 salary increases ranged between 9.5 per cent and 12.6 per cent, against an earlier projection of around 10.1 per cent. With inflation at 4 per cent, salary hikes for the year range from 5.5 per cent to 8.6 per cent.

"A robust GDP growth and higher business confidence are the two critical factors that have led to the higher average salary increases in 2003," said Nishchae Suri, business consulting leader, Hewitt Associates (India).

Hewitt predicted that sectors like non-banking financial services, software development and entertainment would see the highest growth in salaries in 2004.

As regards employee groups, it has projected that professionals and skilled technicians will lead the way in 2004 with 13.4 per cent increments.

In 2003 too, this group received the highest hike of 12.6 per cent. In fact, this will be the fifth consecutive year when professionals are slated to get the biggest raises.

Comparing with other countries, Hewitt said Indian employees were better placed than their counterparts in the Asia-Pacific, where hikes will be a shade lower at around 10 per cent, and in the West, where increments will be in single digits.

Still, the 2004 hikes are well short of the 1997 increments, regarded in industry as the biggest raises ever.

"Although we may not reach the levels of 23 per cent achieved in 1997, the current growth is very encouraging," Suri said.

Hewitt surveyed 521 multinational and Indian companies across 23 industry segments, representing nearly 650,000 employees between November 2003 and January 2004.

The survey measures actual and projected salary increases in five employee categories: senior management, professional and skilled technicians, clerical and support staff, and manual workers.

The study also found that Indian companies were fast catching up with multinationals by putting in place performance-oriented appraisal systems.

Those employed with Indian firms received a marginally better salary hike of around 14 per cent in 2003 compared with 12 per cent at multinational companies.