Though the year 2008 has seen a strong average salary increase of 14.8 per cent, the average salary projections for the coming year are lower by almost a percentage point at 13.9 per cent, according to a new study by Hewitt Associates.
Projections for 2009 are slightly lower than the increases given in 2008 across sectors, with telecom being the only sector showing an increase. The telecom sector is projected to see continued growth in India specially with the advent of five new players over the last one year.
Companies are looking to balance the pressures of inflation and lower Human Resource (HR) budgets by increasing productivity (57 per cent) and redeployment of manpower (31 per cent). Meanwhile 30 per cent of them stated that they have increased performance linkages to counter fixed pay increases. Only 20 per cent of the organisations surveyed mentioned a hiring freeze or slowdown. Only one per cent of the companies are looking at increasing work hours to manage rising costs of business while four per cent of the organisations mentioned a promotion freeze -- all being from the IT, ITES and BFSI sectors.
Adversely impacted by the recent rupee-dollar volatility and the slowdown in the global economy, the IT-ITES sector is treading cautiously on salary and rewards. The study reveals that the average attrition for 2009 YTD across industries is at 15.4 per cent which is a marked drop from the average attrition for 2008 at 19.4 percent.
“India is currently mirroring the global macro-economic scenario. However, India’s domestic consumption story remains intact. While salary increases in India have been between 14- and 15 per cent since 2004, a slightly lowered projection is not a sign of worry. This is a good time for organisations to consolidate their HR strategies towards a high performance orientation and also look at removing redundancies from their organization structures,” said Sandeep Chaudhary, leader of Hewitt's Rewards Consulting Practice in India.
