Salaries to grow by 10% and organisations continue to increase headcount
- 10% salary increase expected across industries in 2018, consistent with 2016 and 2017
- 55% companies indicate hiring intentions in the next 12 months, as against 48% last year
- 11.5% attrition recorded across sectors, with the highest attrition reported in Shared Services
Date 23.01.2018 - As per Mercer’s 2017 India Total Remuneration Survey, organizations are expecting to increase salaries by 10% across industries and career levels in 2018. 55% of these companies are expecting to increase their headcount. The comprehensive survey represents 791 organizations across various industry sectors. Among different industries surveyed, the projected salary increase ranges from 9% to 10% overall.
“Indian industry continues to project low double digit increases, driven by a combination of an optimistic economic environment and a scarcity of the right talent. Though cross industry ranges have narrowed down to within a 1% point, we are witnessing more pronounced sub-segment differences within industries,” according to Shanthi Naresh, India Business Leader, Careers Business, Mercer.
In 2018, one in two companies are planning to increase headcount, with Shared Services and Hi-tech leading the pack, similar to what was seen in the past two years. “The Indian High Tech Market is undergoing a tremendous change and disruption, due to changing nature of jobs. New technologies like Artificial Intelligence, Machine Learning, Automation, Robotics, IoT have changed the skills required to perform the job and there is a constant upskilling and reskilling in the market. IT employers are increasingly hiring for newer skill sets. In the Shared Services sector, there is an influx of captive organizations across retail, FMCG, manufacturing and pharmaceuticals organizations. Newer roles are emerging in supply chain planning, analytics, demand planning, computer imagery , store design , merchandising etc With the evolution in value chain of work and the advent of such transformational roles, companies are looking at increasing headcount” says Shanthi Naresh.
The overall actual attrition witnessed in 2016 was 11.5%, with the highest attrition reported in the Shared Services sector at 19.4%, followed closely by the life sciences sector at 14.0%. There is a marginal downward trend from last year, where the overall attrition has gone down by 1.8%, from 13.3% to 11.5%. There is an increase in attrition in the consumer sector, which is facing greater challenges of retaining talent.
From a retention standpoint, R&D and sales professionals across levels, continue to challenge organisations while from a hiring standpoint organisations find it hard to attract engineering and sales professionals. The research ecosystem in India presents a significant opportunity for multinational corporations and several MNCs continue to shift their research and development (R&D) base to India. Additionally, things have been looking positive for the Indian manufacturing sector as the Government has looked to make India the next manufacturing destination in the world. There has been success with the likes of Chinese smartphone makers, Taiwanese electronics major, Swedish auto maker and the likes, setting up big manufacturing units in India. All this is driving engineering as well R&D jobs to be rated as hot-jobs in India- tough to hire and retain.
Actual variable pay of 15.0% delivered in 2017, was similar to the target percentage, indicating that business performance in 2016 was aligned more to “meeting expectations”, rather than “exceeding expectations”. So, it was business as usual.
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