India to See Higher Salaries at 9.3% Increase in 2022, Up from 8% in 2021: Willis Towers Watson Survey

India Inc salaries are anticipated to see a median salary rise of 9.3% in 2022 – rendering to an average salary rise of 8.8% — as compared to the actual median salary rise of 8% (average salary rise of 7.4%) in 2021, according to the latest Salary Budget Planning Report by Willis Towers Watson.

The high-tech sector in anticipated to see the highest salary rise at 9.9% in 2022, followed by the consumer goods and retail sector at 9.5%, and manufacturing at 9.30%. In terms of comparable rise to last year, the high-tech sector again leads with a forecast of ~ 1.9% increase from 2021.

India’s projected salary rise is highest in the Asia Pacific region for the next year as confidence gains over increased business outlook in the next 12 months and firms recoup from the economic fallout of the pandemic and cope with mounting challenges enticing and retaining employees.

As a large developing market, India persists to plan the highest salary rise for 2021 in the Asia Pacific region. Sri Lanka is forecasted to witness rise of 5.5%, China at 6.0%, Indonesia at 6.9%, and Singapore at 3.9%.

According to Mr. Rajul Mathur, Consulting Leader India, Talent and Rewards, Willis Towers Watson mentioned in a statement: “Improved business confidence is clearly transforming into higher salary budgets and better hiring activity. The pandemic was a turning point in the way organisations plan their individuals spend. As talent attraction and retention continue to be a challenge, the core employee value proposition will require to go further than just competitive salaries, and gradually focus on a wider range of benefits, wellness, upskilling and the overall employee experience. This trend is expected to reshape the people spend and total rewards philosophy in India going forward”.

Employees can also anticipate a higher average variable pay at 15.7% in 2021 for the 2020 performance year. In terms of employee sections, the middle management, professionals and support staff category achieved the most proportionate increase on variable pay from 11.6% in 2020 to 22.2% in 2021. Payout at the Executive level is anticipated to slightly increase to 27.9% from the actual increase of 26% in 2020.

For leading performers, the average salary increment budget allocation is 22.1%, although for average performers it stands at 43%. “With modest salary increments in 2020, organisations have tilted towards a wider distribution of variable pay across employee segments by role, seniority and performance levels this year,” added Mr. Rajul Mathur.

The Salary Budget Planning Report by Willis Towers Watson has 435 Indian companies participating this year.