Appraisals this year likely to average at 9.5%, Survey finds

 

Highlights: 

1. The survey projects a drop in pay increases to an average of 9.5% across industries

2. Sectors like Cement, Transportation/Logistics/Shipping Services, Financial Institutions, Metals, Energy, Retail, Engineering Services, Telecommunication Services, Real Estate and Infrastructure, others are projected to record a pay hike in the range of 7.6% to 9.9% in 2017 

3. Sectors like Consumer Internet Companies, Life Sciences, Professional Services, Chemicals, Entertainment Media, etc., are projected to record double-digit growth in salary  hike in the range of 10.2% to 12.4% in 2017
 

As the Appraisal Process of India Inc nears, employees are likely to witness a decline in their pay hikes to an average of 9.5% across industries on account of Brexit, changes in US government and back home the government's demonetisation decision, says a latest survey by Aon Hewitt. 

The global talent, retirement and health business firm Aon Hewitt had recently conducted a survey titled 'Salary Increase Survey' in India which analysed data across 1000 plus companies. 

“The survey projects a drop in pay increases to an average of 9.5% across industries. While it’s a marginal decrease from the 2016 spend, it reflects maturity that India Inc has displayed amidst global and Indian economic and political events,” Aon Hewitt India said in a press release on Wednesday. 

“Political changes and economic headwinds have had an impact on business performance. However, the trend this year reflects a gradual slowing of pay increases and higher emphasis on productivity and performance – quite literally a ‘graying’ of salary budgets for India,” Aon Hewitt India partner Anandorup Ghose, said in a statement. 

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According to the survey findings, sectors like Cement, Transportation/Logistics/Shipping Services, Financial Institutions, Metals, Energy, Retail, Engineering Services, Telecommunication Services, Real Estate and Infrastructure, Hi Tech/Information Technology, ITeS, and Engineering and Manufacturing are projected to record a pay hike in the range of 7.6% to 9.9% in 2017. 

However, for sectors like Consumer Internet Companies, Life Sciences, Professional Services, Chemicals, Entertainment Media, Automotive/Vehicle Manufacturing, Consumer Products, it has projected a double-digit growth in salary hike in the range of 10.2% to 12.4% in 2017.  

The findings have shown that the segment of population that features as ‘high performers’ have fallen to 7.5%, the lowest number recorded in the 21 years of Aon Hewitt's 'Salary Increase Survey' conducted in India. 

Commenting on pay difference in 2017, Ghose said, “The last year has shown organisations take a strong view towards performance differentiation and not only have bell curves become sharper, the pay differentiation between top and average performers has also increased.” 

The attrition rate in the country last year was at its lowest in five years and was similar to 2015 at 16.4%. 

"While attrition was contained at a broader level, key talent attrition increased from 7.3% in 2015 to 12.3% in 2016," the survey noted. 

As per the survey results, apart from inequity of pay, role stagnation and limited growth opportunities were the key reasons cited by the employees for voluntary attrition last year.

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