IT industry projects 10.1 pc salary increase in 2013Author : Preeti February 20, 2013 0
BANGALORE, INDIA: In the face of considerable global uncertainty, the Indian ITeS industry can be described as truly resilient. The sector projects an average salary increase of 10.1 pc for 2013.
According to a survey by Aon Hewitt, the global human resource consulting and outsourcing business of Aon Corporation, BFSI captives and other captives are projecting salary increase at 10.2 pc. Third party service providers on account of tough global economic conditions, depreciating rupee and huge cost pressures on the other hand posted an average salary increase of 8.9 pc. Organisations are looking at various ways to rationalize wage costs and improve utilization and productivity, with a view to sustain desired business performance.
Hi-tech industry posted an average salary increase of 10.5 pc. Margin compression, a cautious outlook in terms of the global economic state and large bench strength have led to IT service organisations projecting a conservative salary increase of 9.6 pc.
Sandeep Chaudhary, Partner – Talent & Rewards at Aon Hewitt India said: “In sync with the economic outlook, 10.3 pc increase is among the lowest the country has seen in a decade (barring the subprime crisis year). Though business sentiment is strengthening on account of inflation reaching a three-year low and stock markets rising upwards, the cautious streak is evident in the projected salary increase numbers”.
On the other hand, IT product organisations, fuelled by growth opportunities in the domestic market and greater penetration in Tier 2 cities, posted relatively higher salary increase of 11.2 pc. A dip in sales for consumer devices, coupled with a shift to smarter devices and tablets has dampened the mood for the semiconductor industry which has reported a salary increase of 11.3 pc, down from 12.1 pc in 2012.
The study shows a wide variance of salary increases across sectors. Financial services, technology, outsourcing have seen the greatest volatility and remain cautious in 2013. Consumer and industrial sectors which so far have been resilient, also reported conservative increase projections.
The telecom industry, challenged by myriad business and regulatory issues continues to lag the salary increase space with projections for 2013 at 9.6 pc.
Sandeep added, “Cost consciousness and performance orientation are the key themes this year. Organizations are looking at compensation and productivity together and hence closely evaluating the return on compensation spent”.
Despite a year in which India’s growth came to a decade low, corporate India reported an average overall attrition of 19.3 pc for 2012. With a growing recognition that key talent is a sustainable competitive advantage, organisations are reshaping their strategies to safeguard this talent group. This is also reflected in the lower average attrition number for key talent at 5.7 pc.
Sandeep Chaudhary added, “Wage inflation will be a high pressure point for sectors where wage cost is a significant part of operating expenses and revenues. Sectors where wage cost is relatively a small ticket item, the minimum fair pay increase will remain strong”.