India to see 10.8% pay rise

Tower Watson report says net salary increase in 2016 is expected to be 4.7%, against 4.5% last year

India is expected to see an overall projected salary increase of 10.8 per cent, says the Towers Watson 2015-16 Asia-Pacific Salary Budget Planning Report.

Factoring inflation at 6.1 per cent, the net salary increase in 2016 is expected to be marginally higher at 4.7 per cent as against 4.5 per cent last year, when inflation was 5.9 per cent.

The report said 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 were 41 per cent, from the earlier 58 per cent.

BRIGHTER DAYS

• Across employee levels, 'top performers' get increases averaging 12.5 per cent, while 'above average' and 'average' performers get 11 per cent and 9.7 per cent raises, respectively
   
• Salary budgets in the Asia-Pacific region are set to rise 6.8 per cent in 2016, slightly higher than 6.6 per cent in 2015
   
• Average inflation in 2016 is forecast to grow at 3.4 per cent, up from 2.5 per cent in 2015

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 one in terms of higher increases going to top performers. The latest research shows that across employee levels, 'top performers' get increases averaging 12.5 per cent, while 'above average' and 'average' performers get 11 per cent and 9.7 per cent raises, respectively.

Salary budgets in the Asia-Pacific (Apac) region are set to rise 6.8 per cent in 2016, slightly higher than 6.6 per cent in 2015. And, once inflation is factored in, average increases will be 3.4 per cent next year, compared to 4.1 per cent this year. In 17 of the 22 Apac 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 per cent, up from 2.5 per cent in 2015.

The 2015 report is a bi-annual survey compiled by Towers Watson's data services practice. It was conducted in July and about 2,000 responses came from companies across 22 markets countries in Apac.