The Telegraph
Since 1st March, 1999
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Salary hike boom for back-room boys

New Delhi, Nov. 11: It pays to be a back-office guy in India.

A Hewitt Associates’ survey has shown that IT-enabled professionals in this country had the highest pay hike this year with an average increase of 14 per cent among employees in all sectors in the Asia-Pacific region.

This year’s increase was, however, 10 percentage points lower than the industry’s average salary increase in 2002.

“IT-enabled services like call centres, transaction processing centres, medical transcription centres and other business process outsourcing (BPO) units are showing the highest growth in salary and the trend will continue,” Hewitt’s India business consulting leader Nishchae Suri said.

The study, however, projected a higher wage increase in the Indian software development industry in 2004 compared with the IT-enabled services firms, though the latter would retain their status as high wage payers. Software firms can be expected to raise salaries by 14.2 per cent on an average next year.

According to Hewitt Associates, there was an average overall growth in salary in Asia this year with the highest in India followed by South Korea, the Philippines and China. The survey covered 991 foreign, locally-owned and joint-venture companies between July and September 2003 in 11 markets of India, Australia, China, Hong Kong, Japan, Thailand, South Korea, Malaysia, the Philippines, Singapore and Taiwan.

The icing on the cake for the sub-continent's workers came in Hewitt's statement that none of the participating companies in India intended to impose wage freezes in 2004. Around 4 per cent of the responding firms said they had done so in 2003. While Malaysia and the Philippines, too, projected no wage freezes for the next year, 2 per cent Australian firms and around 32 per cent Hong Kong firms said they would resort to wage freezes.

Variable income or earnings from incentives and bonuses are likely to go up from 18.8 per cent of the compensation package to 21.2 per cent in the coming year for top managers in India.

However, this still remains short of the 28 per cent paid to Australian managers, which is the highest average variable pay given to top managers in the region.

The global manpower consultants said variable pay as a percentage of total compensation is still seen by employers as an important means of attracting and engaging senior management employees.

The India survey is being conducted in two phases. The results of the second phase, which will target 500 companies industry-wise, will be released in January next year, said Suri.

Hewitt’s regional managing director Mick Bennett said, “Although employees in countries with faster growing economies saw reasonable pay rises, the increases are only slightly higher than those of the previous year.”

After India, employees in the Philippines enjoyed the biggest average salary increases, ranging from 7.1 per cent to 8.6 per cent across job categories, compared with the respective 2002 figures of 6.4 per cent to almost 10 per cent.

In China, average salary increases ranged from 6.7 per cent to 7.3 per cent. The respective figures in China for 2002 were 6.5 per cent and 8.7 per cent.

In the more developed economies of Hong Kong and Singapore, salary increases remained low.

In Singapore, the average overall salary increase budget for 2003 ranged from 2.1 per cent to 2.4 per cent, while Hong Kong's employees were left with increases in the range of just 1.3 per cent to 1.5 per cent. In Thailand, Malaysia, Taiwan and Australia, average salary increases for 2003 ranged between 3 per cent and 5 per cent.

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