India has witnessed tremendous economic growth over the past few decades, resulting in the growth of various industries and job opportunities. Along with this, the salary structure in India has also undergone significant changes. With the increase in competition and the rise in the cost of living, salary increments have become an integral part of the Indian corporate culture. In this article, we’ll discuss the salary increase trends in India.
Salary Increments in India
Salary increments in India are dependent on various factors such as the industry, job profile, performance of the employee, company policies, and the state of the economy. In general, salary increments are given to employees on an annual basis, and it’s considered a way to recognise and reward their hard work and contribution to the organisation. Most organisations also practice a one-time bonus or performance-linked incentive pay plan.
According to a survey conducted by Aon, a leading global professional services firm, the average salary increase in India in 2021 was 8.6%, which is a slight decline from the previous year’s average of 9.3%. However, it is still higher than the average salary increase in many other countries. The survey also highlighted that the top performers in organisations were rewarded with a 14.5% salary increase, which is still proportionally higher than the previous year.
The salary increment trends vary significantly across different industries in India. The IT industry, which is one of the highest-paying industries in the country, witnessed an average salary increase of 7.3% in 2021, which is lower than the average salary increase in other industries. On the other hand, the pharmaceutical sector which performed well during the pandemic, witnessed an average salary increase of 10.8% in the same year. The banking and financial services industry, which has been recovering from the economic downturn caused by the pandemic, witnessed an average salary increase of 8.8%.
Job Profile-wise Trends
The salary increment trends also vary depending on the job profile. According to the Aon survey, employees in middle management positions received the highest average salary increase of 9.4%, while employees in senior management positions received an average salary increase of 8.7%. Entry-level employees received the lowest average salary increase of 7.6%. This is because companies tend to focus on retaining their experienced and high-performing employees.
The salary increment trends also vary depending on the location of the company. The Aon survey found that companies in tier 1 cities such as Delhi, Mumbai, and Bangalore offered the highest average salary increase of 9%, while companies in tier 2 and tier 3 cities offered a lower average salary increase of 8.5%. This is because companies in tier 1 cities are more likely to face stiff competition in attracting and retaining talent.
Impact of the Pandemic
The COVID-19 pandemic had a significant impact on the salary increment trends in India. In 2020, many companies were forced to freeze salaries or offer lower salary increases due to the economic downturn caused by the pandemic. However, in 2021, the situation had improved, and most companies were again able to offer salary increments. However, the salary increments were lower than the previous year’s average due to the uncertainty in the economy and the impact of the pandemic on business operations.
In conclusion, salary increment trends in India vary significantly across industries, job profiles, and locations. While the average salary increase in India is higher than in many other countries, it has been impacted by the pandemic in recent years. Companies tend to reward their top performers with higher salary increments, while entry-level employees receive lower increments. With the rise in the cost of living and the competitive job market, salary increments will continue to play a crucial role in attracting and retaining talent in India.