India is Optimistic to Witness Double Digit Growth in Employee Salaries in 2012

FOR IMMEDIATE RELEASE
Gurgaon, Haryana, India, Republic of (Free-Press-Release.com) December 21, 2011 -- Average Salaries are increasing and attrition rates are slowing down in the country

India has witnessed actual average salary increase of 11% in 2011 and is optimistic to see a double digit growth yet another year in 2012 at an average of 12% across levels·

The increments have been promising not only at Junior or Middle level but also at Senior Management level where 11-12% growth in salaries is expected·

Indian companies have shown better stability and stronger values during recession vis a vis foreign entities ·

Functions like Engineering, Sales, Marketing and support functions like Finance and Human Resources are picking up recruitment

Hay Group, a global management consulting firm, recently released its annual compensation and benefits report. Hay Group forecasts a double digit salary increase in 2012 where companies are giving assurance of a robust outlook in the near term. The salary increase forecasted by the companies stands at 12 per cent.

More than 300 organizations in India participated in the study which analyzes salary data for more than 320,000 employees in the country. The Hay Group study is based on a research of several sectors like Consumer durables, Construction, FMCG, High technology, Chemicals, Oil & Gas, Retail and Services etc. The participant mix has a wide range spread by revenue and size of the organization. Companies are cautious, but also optimistic of long term performance. The pay rises define a balancing trend where employees whilst holding onto their jobs are being covered for inflation and employers are also being creative in managing retention. Organizations have emerged in a mature way post the downturn with a stronger compensation philosophy in place. They have set clear short term and long term targets with cautious hiring, compensation strategy designed around ‘pay for performance’ and a comprehensive view for long term sustainability.

Mr. Sridhar Ganesan, Managing Consultant and Rewards Practice Leader, Hay Group India said, “Hay Group’s research this year finds that employees in India received an average 11 per cent pay rise over the last 12 months though this varies according to location and sector or seniority within an organization. In a short span of last 5 years, Indian employment market has witnessed a range of behaviours with employers on a hiring spree and also in rightsizing mode. The market is now stabilizing and maturing to next level of employer and employee relationships.”

He further added, “It has been observed that there is a constant reinforcement of pay for performance. Bonus figures have been continuously showing an increasing trend year on year, as organizations now believe in pay for performance with controlled merit increments. Companies have been aggressive in variable pay not only at senior management but also at junior management. The target bonus percentage ranges between 8 - 44% of Base Salary at junior management, 11 - 63% of Base Salary at middle management and 15 - 75% of Base Salary at senior management. Organizations have designed variable pay to induce performance driven culture.”

The report analyzed that post recovery from the initial economic slowdown, organizations have become more realistic and cautious in merit increments and are shifting more towards variable pay which is directly linked to individual and organization performance. 79 per cent of the organizations participating paid some form of bonus in the last 12 months. Graduate salaries are also picking up with monthly salaries touching INR 40,000 in job families like Engineering, Sales, Marketing and even in support functions like Finance and Human Resources.

The report also highlighted that organizations are now engaging further into employee effectiveness initiatives. The focus on employee benefits, engagement and enablement is significantly higher than ever before in India.

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