The Telegraph
Since 1st March, 1999
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Survey predicts higher pay rise
- IT heads the chart, banks at bottom

New Delhi, Jan. 23: Pay hikes in 2002 were woeful; but for some of those who wore frowns last year, here’s better news: get set for double-digit growth this year.

Consulting and outsourcing firm Hewitt Associates, which has just released its 7th Annual Salary Increase Survey, projects an average pay hike of 10.1 per cent in 2003, compared with 9.7 per cent in 2002, which was a sharp drop from 12.8 per cent the year before.

The survey covers 374 organisations across 20 industries. It shows that the average salary increase will range between 8.5 per cent and 11.4 per cent in 2003 for various employee groups.

That the year will be better than the last is also reflected in the fact that a mere 4 per cent of all survey respondents indicated the possibility of a salary freeze in 2003, compared with 11 per cent in 2002.

“The slight recovery in salary increase in India when compared with levels in 2002 indicates an improvement in the economic outlook, as well as projections by companies across the Asia-Pacific region for higher average salary increases,” said Nishchae Suri, who leads Hewitt’s measurement practice for South and West Asia.

For the fourth year running, the group — professional/supervisors — will top the charts with an expected rise of 11.4 per cent.

Again, it’s a bad year for the boss. The survey says senior/top management salaries will rise 10.2 per cent, which would mean the sharpest decline in growth across employee groups over six years from around 24 per cent in 1997.

Managers can expect an average pay rise of 10.8 per cent, clerical/support staff 9.8 per cent and manual workers 8.5 per cent.

Among industries, information technology may have lost much of its glamour but the IT-enabled industry — call centres, medical transcription firms and back-office operations — will still hand out the highest average salary increases of 12.7 per cent.

Banks will be the most niggardly paymasters with average hikes projected at 5.6 per cent.

Across all employee groups surveyed, salary increases for 2002 ranged from 7.7 per cent to 10.9 per cent. This was lower than 2001, when the extent was 10.2 per cent to 14.5 per cent.

“Indian organisations are rapidly aligning their pay levels both regionally and globally,” Suri added.

The study has found that the contribution of variable pay to the total cost to company increased in 2002 across employee groups, except for manual workers, and is projected to increase further in 2003. Variable pay is a performance-related award that must be re-earned each year and does not permanently increase base salary.

This is again in line with international practices.The level of variable pay as a percentage of the total cost to company was the highest for top management at 16.5 per cent for 2002. This is expected to rise to more than 19 per cent in 2003.

The study showed that perquisites, flexible work hours, compressed work-week and telecommuting emerged as among the most popular measures to retain employees. Areas most prone to retention challenges were infotech, sales and operations.

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