The year 2022 is set to bring cheer for employees as a combination of high attrition in a few sectors, better performances by companies and some cost saving due to hybrid working model are likely to beat pre-pandemic levels of hikes, with companies possibly shelling out even double-digit salary hikes for certain niche skill sets.
HR services firms Willis Towers Watson and Aon have projected salary hikes of 9 per cent and 9.3 per cent for 2022, respectively, with the Willis study even saying that Indian companies are likely to emerge as one of the best paymasters in the Asia Pacific region in the year. The respective 2021 increment figures stood at 7.4 per cent and 8.8 per cent, according to the agencies.
Consulting firm Deloitte's early projection of 8.6 per cent hike for 2022 is an increase from the 8 per cent it concluded for 2021.
We are seeing close to 10 per cent hike in 2022. For 3 - 4 years before the pandemic, the average was 6 - 8 per cent. In the upcoming year, you will see a significant increase compared to the pre-pandemic levels, driven by companies moving away a little from pay for performance to pay for resilient workforce as productivity has been up despite employees going through several pains in the past year, said Randstad India's MD and CEO PS Viswanath.
It's also a byproduct of companies being willing to pay a premium to get talent which will make the organisation future-ready, he added.
Global professional services firm Roopank Chaudhary's partner for human capital business, Aon, said companies gave out hikes of 9.3 per cent or so in 2019 and that is where 2022 seems to be headed towards.
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Even in 2020, when companies cut pay, the average hike was 6 per cent. In 2021, companies gave 8.8 per cent hike. The 2021 number can be seen on a lower base, but the 2022 projections are clearly due to buoyancy and demand for tech and digital talent. Wherever tech talent goes, salaries go up, he said.
With variable pay being a function of business performance, even bonuses will certainly be better than it was in 2021, he added.
Randstad's Viswanath pointed out that 9 - 10 per cent is the average hike likely across industries, but the tech sector can expect an above average increment.
High-tech sectors will see the highest levels of increase, while some niche skills could get almost double these numbers. For instance, blockchain technology can see 20 - 22 per cent, robotic process automation, cybersecutiy and artificial intelligence could see 16 - 20 per cent, while SEO SCM, mobile platforms and cloud computing are likely to see 14 - 16 per cent hikes, Viswanath said.
Meanwhile, retail, consumer products and manufacturing could see 9 - 9.5 per cent hike on average.
The industries with high attritions, such as IT ITeS, e-commerce and startups, will see the highest increments, added Aon's Chaudhary. Even other industries like financial services and professional services consulting, audit and tax firms are in high demand and are expected to generate good hikes in 2022, because the markets and economy are doing well, he said. If companies do well, derived services do well, given the professional demand. Hospitality, manufacturing, aviation, engineering services and energy are among the sectors expected to reward the least hikes in 2022.
When it comes to roles, data sciences, big data, UI, cloud interface are the biggest gainers within the technology space. Even control functions like finance and risk compliance are looking at a fair amount of hikes, Chaudhary said.
The digital roles are also expected to do well, but roles more towards risk compliance or those with a digital tech element like digital sales, digital marketing, digital design, data management seem to have the maximum amount of premiums, said Chaudhary.
The greatest cause for cheer is for employees in the junior to middle level because that's where attrition is the highest, the experts said.
We are seeing maximum hikes in the 5 - 8 years experience bracket. The demand is quite high there because companies want people with some experience. As you go higher up the ladder, you see more changes in terms of incentives, bonuses and retention plans. There is more of a shift towards variable compensation at higher levels, said Viswanath.