Salaries of professionals in India are expected to increase by an average of 6.4 per cent in 2021, as per a survey.
The Salary Budget Planning Survey report by Willis Towers Watson reveals that projected increments in 2021 will be marginally higher than the average actual increase last year, when it was 5.9 per cent.
Of the companies surveyed across India, 37per cent project a positive business revenue outlook for the next year, which is higher than the 18 per cent in Q3 2020. But hiring does not seem to be keeping up. Only about 10 per cent of the companies intend to hire, whereas 14 per cent planned to hire in the last quarter.
About 20.6 per cent of increments budgeted for are being given to top performers, who make up 10.3 per cent of the employees in the country. In other words, for every rupee set aside of an average performer, Rs 2.35 is allocated to a top performer and Rs 1.25 to an above average performer.
Rajul Mathur, consulting head – talent & rewards, Willis Towers Watson India, points out that there is definitely “an increased optimism on business recovery, but it is yet to translate into the salary increment budget.” Companies will tend to prioritise allocation towards protecting critical and high-skilled talent. In 2021, we there will continue to be more emphasis on “pay for performance and pay linked to business output.”
In high tech, pharmaceuticals and consumer products & retail sectors, the media salary is projected to increase by 8 per cent, which is higher than what is generally projected for the industry.
A seven per cent increment is projected for the financial services and manufacturing sector, whereas a six per cent increment is projected for the BPO sector. In the energy space, the increment is the lowest – 4.6 per cent.
As Arvind Usretay, director, rewards, Willis Towers Watson India, explains, the impact on different sectors was different. “Some sectors such as hospitality, aviation, travel and tourism were hit harder than the others. Sectors, such as pharma, FMCG, e-commerce and high-tech have experienced growth”, which is why their hiring plans and salary budgets for 2021 seem positive.
At the executive level, the median salary increase for 2021 is projected at seven per cent, lower than the 7.1 per cent in 2020. For middle management, professional and support staff, a reduction from 7.5 per cent (last year), to 7.3 per cent this year is projected. The workers belonging to the Production Manual Labour category are likely to receive lower increments of 7.2 per cent as compared to 7.7 per cent in 2020.
With work moving online, the virtual work environment “has brought to the fore the role of distributed leadership.” Organisations will have to come up with new structures to “identify, recognise and reward leaders for their ability to lead change” and have a positive impact on engagement and productivity.