Employees to see double-digit salary hikes in 2014, but high inflation may erode gains: Survey
13 Nov 2013
Employees in India could expect double-digit salary hikes in 2014 as companies deal with challenges such as attracting and retaining critical talent. However, high inflation would erode much of their wages, according to a Towers Watson survey.
Average salary across Asia Pacific was set to increase 7 per cent in 2014, while Indian employers would be expected to dole out a hike of 11 per cent. After factoring in inflation, the salary rise in India would be only 2 per cent, the survey said.
After factoring in inflation, China and Vietnam at 4.9 per cent are set to lead the way, while Japan at 0.5 per cent and India at 2 per cent were among countries offering the smallest raises.
According to Sambhav Rakyan, Global Data Services practice leader, Asia Pacific, at Towers Watson overall, the Asia Pacific data for 2013 and 2014 looked similar, so companies needed to do budgeting for salary increases much the same as last year.
He further added that for fast growing companies which saw revenue exceed the cost by a huge margin, it was easier to be aggressive on salary budgets than it was for low growth companies.
The survey added that companies in Asia Pacific, including in India, were finding it hard to both find and retain suitably skilled staff.
Over 80 per cent of the companies surveyed in India said a larger portion of their salary budget allocation would go to high performers in 2014, and the retail industry in India particularly stood out with all respondents planning along these lines.
Subeer Bakshi, director- talent and rewards, Towers Watson India, said the company's research clearly indicated that both employers and employees in India ranked base pay among the top two retention drivers.
According to Bakshi, Indian companies continued to offer double-digit salary hikes as they dealt with the challenge of attracting and retaining critical talent. High levels of inflation ended up eroding much of the hike, he added.
