Mercer Predicts Salaries to Go up by 10.5 Per cent in 2016
Companies are expected to increase base pay by 10.5% in 2016, but that is not very different from the salary hike seen in 2015, says Mercer’s All Industries Total Remuneration Survey 2015 for India released on Thursday.
Among various sectors surveyed, the projected base salary increase ranges from 10% to 11% overall, with relatively higher increases for the life sciences, information technology and chemical industries, said the report, which surveyed 691 firms across various sectors.
The salary forecasts are the lowest for the consumer, auto and services sectors.
The survey shows that there is an increase in variable bonus pay across industries, from the actual payout of 14.7% in 2014 to 15.4% in 2015, indicating that business performance in 2015 was better than in the previous fiscal year.
“Largely, the current pay increase points toward an optimistic economic outlook driving positive sentiment, with companies expecting to increase their headcount,” said Ruchika Pal, principal and India total remuneration survey product leader, Mercer.
As many as 48% of these companies expect to increase their headcount this year, with technology, services and life sciences leading the pack.
Firms especially find it hard to hire research and development talent as well as engineering professionals, says the survey.
If hiring is a challenge, so is attrition. Organizations across industries are facing a talent crunch as attrition is trending upwards. The overall attrition rate rose from 10.3% in 2014 to 12.6% in 2015, with employees leaving voluntarily.
Even though salary increase differentiation across industries has narrowed, there is considerable pressure on talent retention, as budgets remain tight, said Pal.