New Delhi, Feb 22 : With the trend of a gradual slowness in pay hikes and higher emphasis on productivity and performance, a drop in pay increases to an average of 9.5 per cent is projected in 2017 across industries, according to a survey released on Wednesday.
Prepared by Aon Hewitt India, the 21st edition of its annual Salary Increase Survey in India said that the projection is a marginal decrease from the 2016 spend, it reflects maturity that India Inc. has displayed amidst global and Indian economic and political events.
“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,” said Anandorup Ghose, Partner at HR consultancy firm.
With tighter budgets, it has become imperative for firms to ensure that their ‘top talent’ is identified and remunerated accordingly, the survey pointed out.
The trend of investing in key talent continues. Firms are carving out high potential and hot skills along with high performers as their key talent segment.
“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,” Ghose said.
The company said the attrition rate in India was similar to 2015 at 16.4 per cent.
“While attrition was contained at a broader level, key talent attrition increased from 7.3 per cent in 2015 to 12.3 per cent in 2016,” the firm said.
“While inequity of pay remains a concern, the key reasons cited by employees for voluntary attrition are role stagnation and limited growth opportunities,” it added.