Indian employees are in for a delight as average salary hikes for the financial year 2022 in India are likely to touch pre-pandemic levels. According to Aon’s 26th Annual Salary Increase Survey, salary increment is being projected to grow from an average of 8.8 per cent this year to an estimated average of 9.4 per cent in 2022.
The survey covered 1,350 companies across 39 sectors.The war for talent is getting more aggressive as the survey highlights a 20% attrition rate across sectors in 2021, the highest in over a decade. According to the survey released on Tuesday, most businesses have an optimistic view going into 2022, with 98.9 per cent of companies intend to give salary increases in 2022, as compared to 97.5 per cent of companies in 2021.
The 9.4% average pay hike is the highest in six years, except 2018 when the average increment was 9.5%. The 2021 average pay hike of 8.8% pay hike was higher than the expected pay hike of 7.7% as the economy opened up, and the companies became resilient to deal with the second wave of Covid-19 and manage their growth.
The result of the survey revealed that there is positive sentiment across most sectors, and India Inc is firmly on the path to recovery, with most firms projecting salary hikes back to FY 2019 levels by FY 2022.
As per the survey, IT will be a lead paymaster with an average hike of 11.2%, followed by professional services and e-commerce firms which are projected to pay 10.6% increment to their employees. Even the 2021 laggards like real estate is projected to pay 8.8% hike, as against 6.2% in 2021. Similarly, the restaurant sector which suffered serious brunt of the pandemic in the past 18 months is slated to pay 7.9% hike in 2022.
itin Sethi, partner and CEO of Aon’s performance and rewards businesses in India, commented, “While 2021 is a year where certain sectors remain under stress due to the COVID-19 pandemic, most businesses have an optimistic view going into 2022 and are projecting higher salary increases. We see positive sentiment across most sectors, high investor confidence with sustained foreign direct investment flowing into the country and growing consumer demand across most segments.”
“High double-digit attrition is the strongest we have seen in more than a decade. The war for talent is back in India, which we anticipate will keep salary increases high. The question for corporate India is, will this level of increases be sustainable in the long run?” he added.
The top three sectors with the highest salary increase projected for 2022 for India are technology, e-commerce and IT-enabled services. The sectors with the lowest salary increase projected for 2022 are hospitality, engineering services and energy.
