Salary increments in India to touch five-year high of 9.9 per cent in 2022: Aon survey

Salary increments in India will touch a five-year high of 9.9 per cent in 2022 as organisations are planning to invest in new-age capabilities to build a resilient workforce amid strong economic recovery and positive business sentiment, a survey said on Wednesday.

According to leading global professional services firm Aon’s 26th Salary Increase Survey in India, organizations across industries project a 9.9 per cent salary increase in 2022, compared to 9.3 per cent in 2021. 

The study that analysed data across 1,500 companies from more than 40 industries, noted that the industries with the highest projected salary increases are e-commerce and venture capital, hitech/IT and IT enabled services (ITeS) and life sciences.

Survey participants reported the highest attrition figure 21 per cent - in over a decade in 2021, the report said, adding that highest attrition in over two decades signifies the impact of ‘Great Resignation’ on India.

“Salary increases should come as a welcome break for employees amidst a volatile period. For employers, it could emerge as a double-edged sword when you combine the rising cost of talent with record-high attrition numbers,” Nitin Sethi, partner and CEO of Aon’s Human Capital Solutions in India said.

Sethi said “this trend is fuelled by economic recovery and the need for organisations to invest in new age capabilities to build a resilient workforce.” A positive business outlook is resulting in a higher number of double-digit increments, it said.

Around 88 pc organisations foresee an improvement in business outlook in 2022, 11 per cent higher from 2021, the survey said, adding 33 per cent organisations are expected to give double-digit salary increases in 2022 - an increase of 5 percentage points from 2021. 

“We believe the fundamentals of the Indian economy remain strong and that there is a positive business sentiment. “Even sectors that struggled during the first wave of the pandemic, such as retail, logistics and quick-service restaurants, have bounced back,” said Roopank Chaudhary, partner in Aon’s Human Capital Solutions in India.