India will see salaries increase by 10% in 2019, which is the highest among countries in the Asia-Pacific region, according to a report by Willis Towers Watson.
The global advisory, broking and solutions company says the salaries increased by the same pace in 2018 too and said that steady economic growth, progressive reforms and a sense of optimism in all sectors were the factors which made India edge out other countries in this regard.
In its 'Q3 2018 Salary Budget Planning Report', Willis Towers Watson notes that the maximum salary increase will be in the pharmaceuticals sector, which will see an increase of 10.3%.
The report says salaries in the consumer products and the retail sector will remain at 10%, same as in 2018 and this is attributed to the sector making a recovery, buoyant consumer confidence and increased purchasing power.
Financial services sector – banks, insurance companies and NBFCs – have seen a steady rise in salaries from 9.1% in 2017 to 9.6% in 2019, due to better performance, regulatory reforms and higher premium collections for insurance companies.
"Multinational companies that have manufacturing operations in India or KPO/BPO will see an average salary hike of 10%, which in dollar terms won't impact their cost of operations but Indian companies will see a lower salary hike which will based on their financial performance," said Sambhav Rakyan, data services practice leader, Asia Pacific, Willis Towers Watson.
According to the report, around 42.6% othe f the total salary hike budget will be reserved for top and above average performers.
The salary hike at the executive level is projected to be 9.8% compared to 9.7% in the previous year, while for the mid-management and production/manual labour it will be 10%, a drop from 10.1%.
The report projects decline across all levels when it comes to variable pay allocation. Variable pay at the executive level will see a decline from 20.7% to 17.4%, mid-management level from 12.6% to 10.2% and 9.2% to 8.4% for production/manual labour.
Only 37% of the respondents have projected a positive revenue outlook for the next one year compared to 48% in 2017 hence the conservative variable pay projection, notes the report.
Technical skilled trade, engineering, IT and marketing will be the top four areas of recruitment in the next 12 months, according to the report.