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Survey Finds Organisations In India Projecting 7.7% Salary Increase in 2021

Despite a tough 2020 with stringent lockdowns, India continues to project the highest salary increases among the BRIC nations.

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Aon, a leading global professional services firm providing a broad range of risk, retirement, and health solutions, today released insights from its latest Salary Increase Survey in India. The study, the largest and the most comprehensive of its kind in India, analysed data across 1,200 companies from more than 20 industries.

Eighty-eight percent of the surveyed companies reported that they intend to increase salaries in 2021, reflecting positive business sentiment.

Nitin Sethi, partner and CEO of Aon’s performance and rewards business in India, commented, “We expect the increment dynamics for 2021 to play out over a longer period of time given the uncertainty and potential impact of forthcoming changes. The proposed definition of wages under the new Labor Codes could lead to additional compensation budgeting in the form of higher provisioning for Benefit plans like Gratuity, Leave Encashment and Provident Fund. We expect organizations to review their compensation budgets in the second half of the year once the exact financial impact of the Labor Codes is known.

“It is also possible that some of the salary increments may not translate into higher cash-in-hand for employees if organizations choose to pay higher provident fund contributions on the new definition of Wages.”

Despite a tough 2020 with stringent lockdowns, India continues to project the highest salary increases among the BRIC nations.

Roopank Chaudhary, partner in Aon’s human capital business in India, said, “The highest-paying sectors in 2021 continue to be the ones from last year – Information Technology, Information Technology Enabled Services, life sciences, e-commerce and fast-moving consumer goods. It’s notable that the sectors that were adversely impacted by COVID-19, such as retail, hospitality and real estate, are projecting healthy increases in the range of 5-6%. Such numbers reflect their intent to stay relevant and to control attrition, which had increased for these industries last year.”



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