New Delhi, Feb. 6: Credit card bills are biting harder, personal loans are chewing up a bigger pound of flesh and Mamata Banerjee has just called another road blockade.
Relax. Hope may be lurking no farther than the next annual pay package.
Wage increase in India this year is expected to be the highest in the world across all levels, a survey has forecast.
“Indian workers are set to receive the highest raise in 2007 with companies forecasting an annual salary hike of 12 per cent, resulting in real wage increase of seven per cent,” according to the study by ECA International, the world’s largest membership organisation for international human resources.
In terms of the real wage increase for 2007, India tops the chart of the 45 countries surveyed. Real wage increase is actual annual hike after inflation is taken into account.
In India, the nominal wage hike for this year is expected to be an average of 12 per cent. After allowing for an average inflation of about 5 per cent, the real increase is 7 per cent.
In comparison, salaries for workers in Slovakia may grow by 3.5 per cent in real terms this year — the fastest expected pace of growth outside Asia — while American workers may see their wages inch up by 1.1 per cent.
The findings suggest that India has begun to shed the tag of a source of cheap labour. “The increasing demand for Indian managers within the country and abroad is higher than the supply of talent, leading to high salary increment,” said Pantya Rajan, managing director, Mafoi Management Consultants.
Indian managers are the preferred candidates for positions in West Asian countries, leading to high demand. “So, companies have to throw more money at their managers to get them to stay,” Rajan added.
“In India, companies are growing, the gross domestic product is growing. There stands good reason that people should be earning more,” said Lee Quane, ECA’s Hong Kong-based general manager.
Rajan said the banking industry has robust demand for entry-level positions. Moreover, the call centre industry is showing greater employee churn and organisations are using attractive means to retain talent, he added.
“The salary hike is likely to be more in the fixed component, though organisations are also strengthening their reward management practices and increasingly focusing on pay-for-performance,” said Anand Kapoor, senior HR manager, SkyTech, a Calcutta-based IT firm.