Financial Daily from THE HINDU group of publications
Friday, Jan 30, 2004
Corporate - Trends
Industry & Economy - Human Resources
Average salaries to grow 12 pc this year, says Hewitt survey
New Delhi , Jan. 29
THE Indian worker is reaping rich rewards from the growth in the economy, with average salaries in 2004 projected to grow at 12.27 per cent, according to the annual salary increase survey carried out by leading human resource consultants, Hewitt Associates.
Last year saw a reversal in the trend of shrinking pay hikes after six years and average salaries rose by 11.45 per cent, the survey has revealed.
"While pay increases in 2002 brought little joy, Indian employees were cheered in 2003 with salary increasing ranging between 9.5 per cent and 12.6 per cent," the Hewitt India Business Consulting Leader, Mr Nishchae Suri, told presspersons.
Mr Suri said that owing to greater opportunities as also greater attrition, workers in the professional, supervisor and technical group will continue to enjoy the fattest salary hikes.
While this group saw an increase of 12.6 per cent in 2003, the figure is likely to rise to 13.4 per cent in 2004.
Among other groups, senior management can expect an average salary hike of 11.8 per cent, managers 12.7 per cent, clerical and support staff will get 12 per cent increment, while manual workers will have to be content with 9.7 per cent increase.
According to the survey, IT enabled services that include call centres, medical transcription firms and back office firms, handed out the highest average salary increase in 2003 at 13.8 per cent.
Other sectors that enjoyed higher than average increases last year included software development (13.7 per cent), IT solution providers (12.8 per cent) and shipping and freight sector companies (12.7 per cent).
On the other hand, banks, financial services, insurance and engineering and construction sectors witnessed the lowest pay hikes ranging from 7.6 per cent to 8.3 per cent.
In 2004, the non-bank finance companies (NBFCs) are expected to dole out the maximum salary hikes at 14.7 per cent, followed by software development at 14.5 per cent, and entertainment and media companies at 14.2 per cent.
"Our study also showed that the linkage between pay and performance is getting stronger.
"The results revealed that an outstanding performer typically earns more than twice the salary increase earned by an average worker," Mr Suri said.
An increasing number of organisations are putting in place a variable pay mechanism, with 85 per cent of the 521 respondent companies stating that a part of the salary was linked to performance.
"The last two years have seen the variable pay component rise from 16.5 per cent to 18.4 per cent, specifically for the senior and top management where performance can be measured more accurately.
"It is expected to further rise to over 19 per cent in 2004," he said.
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