Half of India Inc to hire by year end

India Inc has been able to give reasonably high pay increases despite the economic slowdown. And, with the economy expected to grow at over 6 per cent, industry is estimated to see average 8 per cent salary rise for 2009, according to a new Mercer India report.

More, half of all Indian companies plan to add employees over the next three months, states the Mercer India Monitor quarterly survey. Sector-wise, the survey shows pay increases in the pharmaceutical, consumer and manufacturing sectors have been in excess of 7 per cent.

However, the information technology sector, the worst hit, has had almost no increase this year across most companies. Telecom, however, did fairly better.

With a sample of 93 companies, the survey noted the majority forecast a double-digit pay increase for 2010. Most companies do not include variable pay in the salary increment definition but link it to fixed compensation and have a separate budget for the latter.

"The salary increase forecast shows an optimistic sentiment with the overall forecast for 2010 at 10.9 per cent, compared to 8 per cent this year. Most sectors are forecasting double-digit increases for next year.

"The IT sector is showing improved sentiments, with increases expected to leap back to a few percentage points next year, after a long lull of near-zero increase this year," said Gangapriya Chakraverti, India leader of Mercer's information product solutions business.

About 90 per cent of companies review salaries once a year, with April being the most prevalent month, followed by January and July. The majority do not have a formal mid-term review policy.

On bonuses, 90 per cent of the survey respondents say they have an institutionalised variable pay plan, mostly in the form of performance-based bonus plans, while a few companies also have a profit sharing scheme.