India Inc is expected to witness a salary hike of 8 per cent, one of the highest pay increases in the Asia Pacific, in 2010 riding on the country's improved economic performance, says a survey says.
According to the survey by Hong Kong-based HR Business Solutions, Asia Pacific's average pay increase (expected) for 2010 is 4.8 per cent, higher than an actual pay increase of 3.2 per cent in 2009.
India is forecast to witness pay increase averaging eight per cent in 2010 compared to 5.9 per cent in 2009, which represents a 36 per cent upward revision, the report revealed.
"The higher salary increase expected for 2010 is very much driven by increased economic performance. India's economy is expected to grow eight per cent in 2010 from forecast of about six per cent for 2009," HRBS managing partner Elaine Ng told PTI.
"Expected global economic recovery now underway has already led to increased hiring in India as major employers step up staffing to meet business expansion," Ng said.
The survey found that 64 per cent of employers in the country increased their employees' salary in 2009, while 89 per cent are expected to do so in 2010 owing to increasing confidence in business performance.
Meanwhile, another survey by HR consultancy Hewitt Associates said fastest growing markets like India and China are likely to see salary hikes of 9.2 per cent and 6.7 per cent, respectively in 2010.
"China and India's role as future growth engines of the global economy will continue to add fuel to the ongoing war for quality talent. Therefore, it is not surprising to see overall pay increases in these markets, while they continue to lead against most other markets," Hewitt Associates regional leader (broad-based compensation practice) Stella Hou said.
Besides, the HR Business Solutions report further stated that the percentage of Indian employers freezing salary are likely to drop to 11 per cent in 2010 from 33 per cent in 2009 and there would be no pay cuts next year as against a three per cent cut in 2009, the report said.
Interestingly, Pakistan is expected to enjoy the highest pay rise of 9.6 per cent, followed by Vietnam and India, with 8.5 per cent and 8 per cent, respectively, in 2010.
However, HRBS's Elaine Ng cautioned, "Although eight per cent average increment expected for 2010 seems high among Asian nations, about half of it will be eaten up by inflation which is estimated at four per cent in India next year."
Moreover, the average attrition rate across Asia Pacific locations plunged to 5.9 per cent (in first half of 2009) from 13.3 per cent (2008), following cut back of job openings as a result of the global economic crisis.
India's average voluntary resignation rate feel to 5.6 per cent in the first half of 2009 from 14.6 per cent in 2008, a sharp downward adjustment of two-thirds, the report added.