Indian companies are expected to witness a median salary hike of 10 per cent in 2023, mainly influenced by a continuation of the tight labour market and rising inflation concerns, according to a report by global advisory firm WTW.
Companies in India are planning an overall jump of 10 per cent for 2022-23 as compared with the actual 9.5 per cent growth last year, said Willis Towers Watson’s Salary Budget Planning report. Over half (58 per cent) of the employers in India have budgeted for higher salary increases for the ongoing financial year compared to last year, while a quarter of them (24.4 per cent) made no change in the budget.
The median jump may translate into a 9.8 per cent hike with financial services, banking, technology, media and gaming companies expected to offer the highest increments. Only 5.4 per cent have reduced the budget as compared to 2021-22, and at 10 per cent, salary increases in India continue to be the highest in the Asia-Pacific (APAC) region.
China is likely to witness a jump of 6 per cent in salaries, Hong Kong at 4 per cent and Singapore at 4 per cent for next year, it added.
The report, which is based on a survey across 168 countries in April and May 2022 including 590 organisations in India, said around 42 per cent of companies in India have also projected a positive business revenue outlook for the next 12 months, while only 7.2 per cent have projected a negative outlook.
The engineering sector might saw a jump of 52.9 per cent in salary, information technology (65.5 per cent), sales (35.4 per cent), technically skilled trades (32.5 per cent) and finance (17.5 per cent) in the next 12 months.
WTW Consulting Leader India, Work and Rewards, Rajul Mathur said, “Last year saw actual salary increments being higher than budgets and this was largely due to better-than-expected business performance and the need to retain talent. Despite the economic headwinds, higher projections for 2023 reflect cautious business optimism and a continued tight labour market.”
He added that the financial services, banking and technology, media and gaming sectors are expected to see the highest salary increase at 10.4 per cent, 10.2 per cent and 10 per cent, respectively. “We saw significant salary increases across sectors in 2022 and a similar trajectory is expected in 2023. With increased focus on technology enabled growth, the demand for digital skills is driving pay increases for tech talent, especially in the technology, media and gaming, banking and financial services sectors.”
Mathur also said, “We’re seeing organisations focus on long-term incentives, innovative career growth opportunities, flexible working and overall wellbeing to grapple with the current talent supply challenges.”