After a barrage of bad news in the past few weeks, Indians can look forward to something positive as 2016 draws to a close. A survey by HR consulting firm Mercer says that the salaried class can look forward to a 10 percent hike in 2017 and job-seekers can take comfort that India Inc. is expected to hire more people as compared to this year.
The hiring will mostly happen in the hi-tech and shared services sector, according to Mercer's All Industries Total Remuneration Survey, the findings of which were released on Tuesday. The survey represented 768 organisations across various sectors.
The salary hike would be 10.8 percent across industries, while 54 percent of the companies who were part of the survey hinted at hiring more people.
"Over the years, salary increase differentiation across industries has narrowed down. Over the last three years, salary increases have stabilized around 10 percent," Ruchika Pal, Principal & India TRS Product Leader, Mercer, said in a statement.
"Against the backdrop of increased demand for talent and high attrition rates, the majority of companies use inflation rate as the basic minimum level to peg their salary increases and engage their employees," she added.
Variable pay trends
The Mercer survey said that employees got higher actual variable pay of 17.1 percent in 2016 as against the estimated 15.4 percent, indicating "better business performance." The highest variable pay was in the consumer industry, at 22.1 percent of annual guaranteed cash, followed by hi-tech and shared sector at 15.8 percent.
The terms of variable pay target for 2016/17 are likely to remain unchanged, according to the survey.
However, the findings of the survey need to be juxtaposed with the projected slowdown in the Indian economy for almost three quarters (December 2016, March 2017 and June 2017) as a result of the demonetisation of high-denomination currencies announced by Prime Minister Narendra Modi on November 8, 2016.
Also, the hike, which apparently represents the private sector, pales before the hike in salary component for Central government employees as recommended by the 7th Central Pay Commission (CPC) and the likely increase in allowances for them.