Companies to dole out 9.6% average pay hike in 2024, says report

Companies in India are expected to give an average salary hike of 9.6 per cent in 2024, similar to the actual increase witnessed last year, according to a report.

Consultancy firm EY in the report also said that overall attrition dropped to 18.3 per cent last year from 21.2 per cent in 2022, and is set to gradually decline over the next few years.

"E-commerce is expected to have the highest salary growth in 2024 at 10.9 per cent, followed by financial services with a projected growth of 10.1 per cent. "Professional services' salary is set to grow by 10 per cent in 2024, suggesting a rebound as companies invest in strategy alignment to navigate global business complexities. The impact of real estate and infrastructure as an emerging sector is also visible, as increments continue to be stable at 10 per cent," it said in a release on Wednesday.

The report is based on inputs from 80 firms across diverse sectors and their average employee size was in the range of 5,000 to 10,000. India Inc is set for an average salary increase of 9.6 per cent in 2024, similar to the actual increase in 2023, it added.

As per the report, the top three areas of focus for employers are benefits cost planning (43 per cent), employee wellness (29 per cent), and evaluating and aligning with industry standards (20 per cent).

"At 43 per cent, variable pay plan (non-sales) are the most common type of incentives plans offered in the organization, followed by discretionary incentives (32 per cent) and sales incentive plan (21 per cent)," it said.