India To Witness Salary Hikes At 9.3% increase in 2022, Up From 8% In 2021: Willis Towers Watson Survey

India’s projected salary increase is highest in Asia Pacific for next year as optimism returns over improved business outlook in the next 12 months


Pay rises are making a comeback. Companies in India plan to give employees larger rises in 2022 as they recover from the economic fallout of the pandemic and face mounting challenges attracting and retaining employees. Salaries are projected to see a median salary increase of 9.3 per cent next year (translating to an average salary increase of 8.8%) as compared to the actual median salary increase of 8 per cent (average salary increase of 7.4%) in 2021, according to the latest Salary Budget Planning Report by Willis Towers Watson (NASDAQ: WLTW), a leading 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 (median):


Projected salary increases

Actual salary increases
















As a large emerging market, India continues to project the highest salary increase for 2021 in the Asia Pacific region. Sri Lanka is projected to see an increase of 5.5 per cent, China at 6.0 per cent, Indonesia at 6.9 per cent, and Singapore at 3.9 per cent. 

Commenting on the given findings, Sushant Patnaik, Head-HR at Aeris Communications states, "Indian organizations have shown resilience in the face of adversity, including the second wave of Covid-19 hitting the nation and economy hard this year. While the possibility of a pandemic in India remains, business and remuneration sentiment estimate for 2022 indicates that employers are planning for expansion and are considerably better prepared than they were in 2020. In my view, there are many factors that have resulted in a favourable impact on next year’s salary projections. Most firms are now recognising the need to develop some sort of initiatives to prevent talent churn and they are achieving this by implementing retention bonus systems or offering increased increments. They have learnt from the unpredictability in the last and are doing things in a more systematic way now than in the past."

Furthermore, with developing back-to-office tendencies and enhanced vaccination initiatives, the Indian recruitment landscape is poised to alter for the better.”

Figure 2: 2021 Q3 Asia Pacific: Media salary increase budget

Economic outlook, hiring and attrition rates 

Pointing towards a much-anticipated economic recovery, a majority (52.2%) of companies in India have projected a positive business revenue outlook for the next 12 months, up from 37 per cent in Q4-2020. This translates in increased hiring across businesses with 30 per cent of companies planning to hire in the next 12 months. This is almost three times more than last year.  

The survey also shows that a large part of hiring across sectors is likely to happen within critical functions such as engineering (57.5%), information technology (53.4%), technically skilled trades (34.2%), sales (37%) and finance (11.6%), and these jobs will command a high salary. 

In addition, attrition rates in India, both voluntary and involuntary have been lower as compared to other countries in the region. The voluntary attrition rate was 8.9 per cent and the involuntary attrition rate was 3.3 per cent. 

Discussing their action plans and their dynamic perspectives, Vikram Ahuja, Co-Founder, Talent500 says, “We are in the middle of a hiring frenzy for Indian talent. Demand for top talent in India is at an all-time high, primarily driven by: 

a) A surge in demand coming in due to two factors -> Increased VC activity (Indian start-ups have collectively raised $16B in 2021 already), and,

b) Rapid acceleration of digitisation/transformation initiatives undertaken by global enterprises post-pandemic, resulting in the increased setup of global capability centres (more than 200+ companies have set up GCC's in India this year already)  and activity in the services industry 

This surge in demand has led to companies paying extra attention to retention and therefore salary hikes have been one urgent initiative that most organisations have taken. 

Further, Vikram Ahuja asserts, "We expect that salary expectations will continue to increase resulting in a consistently increasing demand from professionals to increase salaries across the board. In fact, for specific digital skills (Data engineering, full-stack engineers etc), we are seeing hikes as high as 25-30 per cent.” 

Figure 3: Asia Pacific attrition rates

Commenting on the findings, Rajul Mathur, Consulting Leader India, Talent and Rewards, Willis Towers Watson said, “Increased business optimism is clearly translating into higher salary budgets and increased hiring activity. The pandemic was a watershed moment in the way organisations plan their people spend. While talent attraction and retention remain a challenge, the core employee value proposition will now need to go beyond just competitive salaries, and increasingly focus on a wider range of benefits, wellness, upskilling and the overall employee experience. This trend is likely to reshape the people spend and total rewards philosophy in India going forward”.

Sectoral trends in India

The high-tech sector in expected to see the highest salary increase at 9.9 per cent in 2022, followed by the consumer products and retail sector at 9.5 per cent, and manufacturing at 9.30 per cent. In terms of proportionate increase over last year, the high-tech sector again tops with a projection of almost 1.9 per cent increase from 2021.

“Covid-19 accelerated the digitalisation process across industries including automation and artificial intelligence. These developments, along with the high-tech sector’s early adoption of the remote working model has positively impacted the sector’s salary projections. The manufacturing and retail sectors saw rising demand driven by the easing of COVID-19 restrictions and a positive outlook of order inflows and consumer sentiment,” Mathur added. 

On the other hand, the energy sector received amongst the lowest actual salary increase in 2021 at 7.7 per cent. The projected salary of the energy sector in 2022 is also the lowest at 7.9 per cent. Mathur explained, “A combination of the prevailing macro-economic environment, typical business cycle and the lingering business impact from the pandemic have adversely affected the energy sector the most. That said, the salary increments for the renewable sector can be expected to be comparatively higher as India moves towards clean energy.”

Figure 4: Industry-wise budgeted salary increases trends

Skills premium and variable pay 

Employees can also expect a higher average variable pay at 15.7 per cent this year for the 2020 performance year. In terms of employee segments, the middle management, professionals and support staff category gained the most proportionate increase on variable pay from 11.6 per cent last year to 22.2 per cent this year. Payout at the Executive level is expected to marginally increase to 27.9 per cent from the actual increase of 26 per cent last year. 

Figure 5: Variable payout

For top performers, the average salary increment budget allocation is 22.1 per cent, whereas for average performers it stands at 43 per cent. “With low salary increments last year, organisations have leaned towards a broader distribution of variable pay across employee segments by role, seniority and performance levels this year,” added Mathur. 

Figure 6: Salary Increment Budget Allocation by Performance Rating 


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