Indian salaries seen rising 10.1% in 2003

Upbeat on an economic recovery, global consulting firm Hewitt on Thursday projected a 10.1 per cent increase in salaries, which is 4.3 per cent higher than that projected in the previous year.

A Hewitt survey, based on responses from 374 firms across 20 industries, also found that the projected increase in salary, adjusted for inflation and other parameters, would be the highest in IT-Enabled Services sector and in senior/top management and only  4 per cent of the respondents indicated a possibility of a salary freeze.

"The slight recovery in salary increases in India when compared with levels in 2002, indicates an improvement in the economic outlook as well as projection by companies across the Asia-Pacific region for higher average salary increases next year," Hewitt managing director Ravi Virmani told reporters in New Delhi.

The survey, carried out on foreign-owned, locally-owned and joint ventures (and no public sector units), said salary increases were projected to rise to 10.1 per cent in 2003 from 9.7 per cent recorded in the previous year, showing a hike of 4.3 per cent.

In the previous survey, Hewitt had found that salary increases fell from 12.8 per cent in 2001 to 9.7 per cent in 2002.

It said the average salary was projected to be in the range of 10.1-12.7 per cent across the top-five sectors in 2003, with maximum of 12.7 per cent rise in ITES, followed by software development (12.3 per cent), FMCG/retail (11.1 per cent), accounting (11 per cent) and pharmaceutical (10.1 per cent).

The Hewitt survey projected 80.9 per cent increase in guarantee salary for senior/top management level and 19.1 per cent rise in case of variable pay in 2003.

It found a drastic reduction in respondents vouching for salary freeze at four per cent in 2003 survey compared with 11 per cent in the previous survey.

Hewitt also said that the trend of outstanding performers earning, on an average, twice than that by the average ones, would continue in 2003 as compared to 1.72 times in 2001.

The bottom-five in salary increase in the survey found banks, automobiles, chemicals, hotels and financial services with projected increase ranging from 5.6-9.3 per cent in 2003.

Banks were projected to have the lowest increase of mere 5.6 per cent in 2003 when compared to 12.7 per cent for ITES.

"The ITES, software development and accounting are all at present in a high-growth phase and the latent pool is far more mobile and dynamic than bank and chemical industries, which are relatively stable and mature," Nishchae Suri, Hewitt's measurement practice leader (South and West Asia), said.

Seventy-four per cent of the respondents of the survey said it was prudent to outer business activities and another sizeable 50.4 per cent faced challenges in attracting new faces and 50 per cent in retaining the talents.

Job groups that posed greatest challenge was IT, followed by sales and marketing/operations.

Suri said the best way to cut down the overall costs was to bring down the administrative costs rather than bringing down the salaries.

The survey projected a 9.22 per cent hike in guaranteed salary for clerical cadre and 7.8 per cent in the case of variable pay.