Salaries In India Expected To Jump 10.3% In 2023: Survey
India’s economy is growing at an unprecedented rate, and with that growth comes a rise in salaries. According to a recent survey, salaries in India are expected to increase by 10.3% in 2023. The study, conducted by Aon plc, a global professional services firm, indicates that the country is poised for a significant salary hike in the coming years.
India’s economy has been expanding consistently over the past few years. The COVID-19 epidemic derailed forecasts for the country’s GDP growth in 2020 of 5.2%. The International Monetary Fund, however, predicts a speedy economic recovery, with GDP expanding by 7.5% in 2021. (IMF).
Companies in India are getting ready to increase salaries due to the country’s improving economy. According to Aon’s survey, salaries in India are forecast to rise by 10.3 per cent in 2023, up from the 9.2 per cent growth predicted for 2022.
Notwithstanding economic turbulence, the newest study from global professional services firm Aon plc predicts that salaries in India will continue to climb by double digits in 2023. Following a 10.6 per cent increase in 2022, the 28th Annual Pay Increase Survey projects a similar increase of 10.3 per cent in Indian salaries in the following year.
Although this year’s forecasts are lower than the previous year’s, the increase is still expected to be in the double digits, causing alarm notwithstanding worries about economic uncertainty. We anticipate a rise in pay as a direct result of increased turnover.
According to the poll, the gap between the supply and demand of talent in India is expected to widen in the coming years, contributing to the high attrition rate of 21.4% predicted for 2022. Salaries in India increased by an actual 10.6 per cent in 2022. Almost 40 different types of businesses were included in the data set used for the study.
Technology platforms and products were predicted to see the highest compensation growth at 10.9%, followed by global capability centres at 10.8% and technology consulting and services at 10.7%. While the financial sector is predicted to grow by 10.1% in 2023-23, overall economic growth is projected to be 3.9%.
Salary increases of 9.7 per cent are predicted for the retail industry, while a rise of 12.2 per cent is expected in e-commerce. Brazil, Indonesia, the Philippines, China, Malaysia, and Singapore are all growing at double-digit rates, with Malaysia and Singapore leading the pack at 5.2 and 4.8 per cent, respectively. According to the leading global professional services organization, strong corporate growth has resulted in a larger share of the workforce being evaluated at higher performance categories.
Increases in productivity at the top are about four times as large as those at the bottom (in companies which have given increments to both categories). Interesting fact: almost 80% of companies do not reward weak performers with a raise, Gandhi said.
“For the past two years, India Inc. has awarded significant salary increases, leaving some businesses unable to pay their employees’ rising salaries. According to Roopank Chaudhary, partner, Human Capital Solutions, India at Aon, “industries that are more globally connected, like Technology Platform and Products, are slightly cautious in their salary budget planning, whereas industries driven by domestic demand, like Manufacturing or FMCG/FMCD, are bullish on their budget planning as compared to their five-year averages.”
Pritish Gandhi, director and leader of Aon’s Executive Compensation and Governance Practice in India, provided an explanation for the anticipated increase, saying, “The non-merit salary increase projections continue to be moving up as firms budget for retaining talent through promotions and off-cycle corrections.” Companies are increasing their investments in important personnel in strategic jobs as they seek to differentiate themselves and maximize talent spending.
Organizations, according to Gandhi, need to take a strategic approach to total rewards to establish a resilient workforce and structure their plans around long-term drivers of pay and performance, even as firms need to adapt pay increases for both merit and non-merit considerations.
What Does This Mean for the Indian Workforce?
The increase in salaries is a positive sign for the Indian workforce. It means that companies are doing well and they are willing to invest in their employees. The increase in salaries will also boost the workforce’s purchasing power, which will positively impact the economy.
The e-commerce sector, which is expected to see the highest salary increase, is also a positive sign for the industry. The e-commerce sector has been growing rapidly in India, and it is expected to continue to do so in the future. The increase in salaries will attract more talent to the sector, which will help it grow even faster.
On the other hand, the manufacturing sector is expected to see the lowest salary increase. This is not surprising as the industry has been facing challenges in recent years. However, the government has been taking steps to boost the industry, which is expected to grow. The increase in salaries in the future will depend on the growth of the industry.
The increase in salaries for top performers is also a positive sign for the workforce. It means that companies are willing to reward their best performers, which will motivate other employees to perform better. This will create healthy workplace competition, ultimately benefiting the company and the employees.
While the findings of the survey are undoubtedly positive, there are some challenges that need to be addressed to ensure that the increase in salaries is sustainable and equitable. Here are some of the key challenges:
There is a significant pay gap between different sectors and industries in India. While some sectors are seeing high salary increases, others are seeing very low increases. This could lead to inequality and resentment among workers in different sectors.
The increase in salaries could lead to inflation, as companies may increase the prices of their products and services to offset the higher labour costs. This could affect the purchasing power of consumers and lead to an overall increase in the cost of living. The increase in salaries could lead to a rise in the cost of doing business in India, which could make the country less attractive to foreign investors. This could affect the country’s overall economic growth and development.
Edited by Prakriti Arora