Marketing Salery

Salaries to increase 9.9% in 2022 but attrition is still the highest in 10 years

Salaries to increase 9.9% in 2022 but attrition is still the highest in 10 years
Written by publisher team

NEW DELHI: Employees in India are likely to get an average salary hike of 9.9 per cent in 2022, the highest in five years, according to a survey by HR consultancy Aon.
The industries with the highest projected salary increases are E-commerce and Venture Capital at 12.4 percent, followed by Hi-tech/IT and IT at 11.6 percent.
Sectors with the lowest projected increase include metals and mining at 8.3 percent, QSR Restaurants at 8.5 percent and cement at 8.6 percent.
The survey analyzed data across 1,500 companies from more than 40 industries.
According to the survey, 33 percent organizations are expected to give double digit salary increases in 2022, an increase of 5 percentage points from 2021.
“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. This trend is fueled by economic recovery and the need for organizations to invest in new age capabilities to build a resilient workforce,” said Nitin Sethi, partner and CEO of Aon’s Human Capital Solutions in India.
Despite a tough few months with the second and third waves of infections during the COVID-19 pandemic, India continues to project the highest salary increases among the BRIC (Brazil, Russia, India and China) nations in 2022, with Brazil at 5.0 percent, Russia at 6.1 percent and China at 6.0 percent.
“ Even sectors that struggled during the first wave of the pandemic, such as retail, logistics and quick-service restaurants, have bounced back by focusing on modern trade/digital channels, which is reflected in salary increases of 8 percent and above. However, we do see some potential headwinds due to anticipated high inflationary pressures and the still-prevalent COVID-19 threat,” said Roopank Chaudhary, partner in Aon’s Human Capital Solutions in India.
The Great Resignations
Despite salary increments increasing 9.3 percent on an average across industries in 2021, the survey participants reported the highest attrition figure – 21 percent – in over a decade. This implies that people are thinking about changing their employer or job. Whether it’s remote work expanding workers’ employment options, the chance to increase salary or, in many cases, employee burnout, the Great Resignation continues with employees leaving their jobs in record numbers.
Employers are recognizing that pay alone may not be enough to retain workers in the current environment. “To succeed, employers need to focus on improving workplace culture, understanding workers’ priorities and helping managers lead remote or hybrid teams,” says Aon.
Another study by Mercer revealed that data analytics, Internet, Engineering, Sales and Marketing are the most difficult jobs for talent and retention.
The survey also revealed that almost all organizations are reverting to pre-pandemic levels of investment in rewards and incentives after a brief dip in 2020.
Salary trends across hierarchy designations are seeing volatile differentials. While a para-professional in the consumer sector commanded a premium of 3.2%, an executive commanded a premium of 10.7% as compared to general industries. While a management level employee in the manufacturing sector commanded a premium of 10.2%, an executive in the sector is in fact witnessing lower than the level median pay.
The war of talent is real!
The survey also found that the salaries for new hires across tenure continued to remain highly competitive with the Premium for last 1-year joiners across levels, more prominent at mid to senior managerial roles.
The survey covered ~14 lakh employees across 988 companies in India.
Technology becoming a true horizontal
Across all employee categories, increments in tech was back to 2019 levels of 9% and higher than all industries average of 8% for 2021. Over a four-year period of 2018 -21, the median to median increase in tech salaries is 17% on an average across career streams. Key specializations which command premium are Software Development, R&D, Pre-sales product consulting and Data sciences to a tune of 12% within the Internet job family.
From location stand point, while Bangalore still commands significant premium for software development engineering roles, average high-tech salaries in Delhi and Mumbai have started showing an upward trend due to majority of the Internet/Ecommerce companies being based out of these 2 locations.

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