India Inc is likely to see an average salary increment of 9.8 per cent in 2023, slightly higher than a 9.4 per cent hike in 2022, and for top talent the increase will be much more, says a survey.
According to Korn Ferry’s latest India Compensation Survey, organizations are focused on retaining critical and key talent through various talent management initiatives and formal retention and compensation plans.
The survey that covered 818 organisations with more than 800,000 incumbents noted that salaries are set to increase by 9.8 per cent in India in 2023.
While the increment was significantly down at 6.8 per cent in the pandemic-hit 2020, the current growth trend reflects the resilience and ability of leaders and employees to reimagine and rebuild for a sustainable future.
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In alignment with India’s focus on accelerated digital capability building, the survey has projected substantial increments in life sciences & healthcare and high technology sectors at 10.2 per cent and 10.4 per cent, respectively.
“Although recession and economic slowdown are being discussed across the globe, there is optimism about the Indian economy with a projected GDP growth of 6 per cent upwards,” Navnit Singh, Chairman and Regional Managing Director, Korn Ferry said.
Singh further noted that for top talent, the salary increment can be anything as high as 15 per cent to 30 per cent.
Salary increase projections for some of the other sectors include services (9.8 per cent), automotive (9 per cent), chemical (9.6 per cent), consumer goods (9.8 per cent) and retail (9 per cent).
While the macroeconomic outlook is positive, there are new and increasing pressures on businesses: changing customer preferences, digital transformation, increased collaboration, and more.
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To stay ahead, most businesses will need to transform their workforce to meet these demands. Further, 60 per cent of the organizations in the survey indicated that they have adopted some kind of a hybrid model.
Meanwhile, employees in Tier 1 cities continue to receive higher compensation in India, when compared with Tier 2 and Tier 3 cities.
However, with the hybrid model and remote work developing into an accepted norm, “we are seeing a shift towards work becoming location agnostic, aiding Tier 2 cities such as Ahmedabad and Pune in giving competition to Tier 1 cities in Fixed Annual Cash received by employees”, it said.