It was a great year for India Inc employees as they earned a 10 year high average salary hike of 10.6 per cent in 2022 and they are projected to receive an average 10.4 per cent raise in 2023, making it the second consecutive year of double-digit salary growth according to Aon India's 27th Annual Salary Increase Survey 2022 released on Monday.
This is the return of double-digit salary growth, as the last time it was this high was in 2012 when it hit 10.7 per cent, according to the survey of 1,300 firms across 40 industries.
India has given itself fatter raises compared to other developed economies in the world because of its 10.6 per cent salary hike this year. According to Roopank Chaudhary, Partner, Aon, India South Asia, the increments are still driven by the supply-demand factor in the Indian talent market compared to more developed economies where inflation plays a large role in increments.
The highest increases were among the start-ups and e-commerce, IT ITeS and other digitally oriented industries this year.
In the year 2023, if corporate India gives 10.4 per cent, as predicted by Aon India, that would make it two consecutive years of double-digit growth, which was last seen in 2015 -- 16 according to the survey findings. It depends on the persistent attrition and the fair amount of margin pressure that IT sector companies are facing.
India Inc. has a 20.3 per cent year-to-date YTD attrition rate in 2022, according to the survey. According to Jang Bahadur Singh, Director, Aon, Human Capital Solutions, it still continues to be one of the highest levels seen in over two decades, even though it has moderated from the 21 per cent last year. He said that the sectors most affected by attrition are E-commerce, early-stage startups, and IT ITes, while most traditional ones such as auto manufacturing are seeing less attrition. Retail, hospitality and travel are bouncing back as the gap between voluntary and involuntary attrition levels has narrowed to around 3 per cent.
A high performer earned 1.7 x more than an average performer who just met expectations in 2022, according to an employee perspective. The data shows that organisations are focused on performance indicators, despite the fact that they have higher salary budgets.