India To See 10% Salary Increase In 2020

India’s projected salary increase is highest in the Asia Pacific


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Salaries in India are projected to rise 10 percent in 2020, marginally higher than the actual increase (9.9%) in 2019, according to the latest Q3 2019 Salary Budget Planning Report released by Willis Towers Watson, a global advisory, broking, and solutions company. The report looks at a range of job grades across various industry sectors and is designed to provide companies with guidance for their annual salary forecasting for the year ahead.

Figure 1: Projected and actual salary increase


Projected salary increase

Actual salary increase



















While salary increases in India are stabilising around the 10 percent mark, they remain the highest in the Asia Pacific region. Indonesia is projected at 8 percent, China at 6.5 percent, Philippines at 6 percent, Hong Kong and Singapore both at 4 percent.  

Figure 2: Comparing India with key markets in the Asia Pacific region

Sharing his perspective on the findings, Rajul Mathur, Consulting Leader – Talent & Rewards, Willis Towers Watson India said, “Though salary increases in India still continue to be among the highest in the region, companies are taking a cautious approach and do not intend to make any significant changes from previous years. Companies are beginning to make selective skill-based compensation adjustments to cater to requirements around automation and digitisation. Going forward, organisations should continue to re-examine the alignment between their business and talent strategies, as well as how to remunerate and reward different segments of the workforce considering their core contribution to business success.” 

Economic outlook and hiring trends

Of the surveyed companies, 28 percent have projected a positive business revenue outlook for the next 12 months, down from 37 percent in 2018. Whereas, 61 percent expect no big change as compared to 57 percent last year; and, 11 percent have a downward revenue projection compared to 5 percent in 2018.

With the cautious business outlook, recruitment efforts are expected to slow down. The survey shows that only 22 percent of the organisations in India plans to add new headcount compared to 29 percent last year. Organisations planning to maintain their current headcount increased from 63 percent in 2018 to 70 percent in 2019; while, 7 percent plan to reduce headcount as compared to 8 percent last year.

Hiring has been stable across sectors like High Tech, Shared Service Outsourcing, Pharmaceuticals, Energy, Retail and Chemicals, while Captives continue to ramp up and expand with newer lines being introduced or insourced into the India operations. However, hiring has slowed down markedly for Automobile, Auto Ancillary and Engineering. 

Sectoral trends

While most sectors like General Industry, Chemical, High Tech, and Pharmaceuticals can expect salary increases around the average mark of 10 percent, Energy, Financial Services and Consumer Products sectors stand out for the highest year on year growth. The Energy sector is expected to see a jump from 8.5 percent in 2019 to 9.3 percent in 2020, the Financial Services is projected at 9.7 percent in 2020 from 9 percent last year and the Consumer Products sectors is expected to see an increase from 9.5 percent in 2019 to 9.9 percent in 2020. 

Figure 3: Industry-specific salary increase budget

Salary increase by management and performance level 

Median salary increase at the Executive level for 2020 is projected at 10.1 percent, a noteworthy increase from 9.6 percent in the previous year. For Middle Management, Professional and Support Staff, an increase from 10.1 percent in 2019 to 10.4 percent in 2020 is projected. The employee group of Production Manual Labour is also projected to receive a higher salary increase of 10.3 percent as compared to 10 percent last year. 

Highlighting a continued shift towards variable pay, especially at senior management levels, the survey found that actual variable pay at executive level increased from 20.7 percent in 2018, to 30.7 percent in 2019. 

Arvind Usretay, Director, Rewards, Willis Towers Watson India said, “Attracting and retaining the right talent at leadership positions is commanding higher pay increases as the leadership pool continues to be limited. The increase is mostly in terms of variable pay as there is a greater focus on pay for performance. That said, companies are also working towards more robust succession planning programmes in order to develop a sustainable leadership pipeline.” 

On salary increases by performance levels, the survey found that on average, 25 percent of the salary increase budget is being allocated to top performers, which represents 11.5 percent of employees in India. This implies that for each Rs 1 allocated to an average or below-average performer, Rs 2.16 is allocated to a top performer compared to Rs 1.3 last year. 

“No longer are employers only looking at compensation alone as a key attraction or retention driver. While compensation continues to be an important element, we are seeing a quiet re-emergence of ‘employee benefits’ underway. If the last decade was about compensation being the key differentiator, the next could well be about ‘purpose-led benefits’. With the employee now seen as a consumer, benefits will expectedly become more segmented, flexible and targeted,” Arvind added. 

Premium Skills in demand

In the Technology, Pharmaceutical and FMCG sectors, Key Account Management roles are in demand, while Data Science and Machine Learning specialisation are being favoured in Engineering. There is generally a high demand for Robotics and Automation Engineers and Project Managers with AGILE / SCRUM certification. 

Further, the report identifies Blockchain, AI and Machine Learning, Cybersecurity and Dev Ops as the most in-demand technology skills in the next 12 months where employers are willing to pay a premium to acquire talent.

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