Retaining its number one position in the world in terms of salary growths, India is likely to witness a double-digit salary growth for the fifth consecutive year.
Employees in India received an average salary increase of 15.1 per cent in 2007, up from 14.4 per cent in 2006, according to Hewitt Associates' 12th annual 'Salary Increase Survey'. The survey report, which saw participation from 550 organisations across 19 industries with 22 sub classifications, further predicts an increase in salaries of 15.2 per cent in 2008.
The sector that witnessed the highest salary growth rates in 2007 is real estate (25.2 per cent), followed by energy and retail. The projections for 2008 are similar, with these sectors more or less retaining their current rankings. Salaries in real estate (infrastructure) are expected to grow at 25 per cent this year.
Sectors that saw the lowest salary increases were pharmaceutical (13.2 per cent), electronics (13.3 per cent), followed by FMCG, automotive and ITES. The projections for 2008 reveal that these sectors will continue to witness relatively low salary increases.
Interestingly, while IT and ITES now rank amongst the lowest in terms of salary growths, these sectors had seen the highest growths for three consecutive years (2002, 2003 and 2004). However, even in the lowest of ranks, salary growths are seen to be above 13 per cent, thus indicating the strong health of the economy. Meanwhile, in terms of attrition rates the insurance sector, followed by ITES and hospitality witnessed the highest in 2007, while automotive, energy and chemicals faced the least. Further, junior manager/ supervisor/ professional continue as the employee group to receive the highest salary increases for the 8th year in a row (2000 - 2007).
Within the six employee groups, this employee group is also expected to earn the highest salary increases in 2008.
The Middle Management has also seen a steady increase in salary increases over the years and is almost in line with Junior Manager/Supervisor/Technical. Manual employee group receives the lowest increase for the 9th year in a row (1999-2007)
While salary increases are largely dictated by talent demand and supply, Hewitt forecasts a gradual decrease in salary increases and a stabilisation of increases to 9-12 per cent by 2012.
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