Salaries to beat inflation in next 5 years

According to Towers Watson-CII Industry Opinions study top managers to corner the major chunk

Salaries are expected to rise above inflation level in next five years, but a major chunk of this rise will be cornered by senior ranked and not much would be disbursed to those at mid or junior levels.

Around 60% of the respondents from small organisations and 54% from large organisations believe this wage inequality would increase over the next five years according to the findings of Towers Watson-CII Industry Opinions Study.

The study observes that the number of jobs is expected to go up in the next five years and the wage gap between the highest and lowest earners across industries is also likely to widen.

At the sectoral level, 70% of companies across financial services segment, 68% from professional services, 62% from consumer discretionary segment, 54% from manufacturing and 36% from energy and utilities believe the wage gap will increase.

"While attraction and retention of quality talent continues to remain a challenge, the future envisages a tougher business ecosystem in light of rising wage costs, potentially an inadequate supply of skilled talent and workforce productivity," Towers Watson India Managing Director Vivek Nath said.

Majority of respondents expect the number of jobs generated in their industry to increase in five years. Most of the job creation would be at the junior levels with the most promising sectors being capital goods and transportation.

The report said though Indian companies are upbeat about the growth prospects in economy, availability and access to quality talent continues to be a serious problem.

About 64% of the respondents believed that attracting and retaining key talent is likely to be a major obstacle to the growth of industry across sectors. India is betting big on manufacturing through the promising 'Make in India' initiative.

Recognising the importance of talent as a critical asset for steering the next wave of growth, firms have indicated that there are four key factors related to skills and talent which can potentially hinder growth over next five years.