Indian IT to give smaller salary increments in 2013, Report

Aon Hewitt today announced the results of the 17th edition of the Annual Salary Increase Survey. Reflecting the economic growth expectations of 5%, India Inc projects an average salary increase of 10.3% for 2013, while the IT sector is likely to dole out lower increments than in 2012. 

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%. On the other hand, IT product organisations, fuelled by growth opportunities in the domestic market and greater penetration in Tier II cities posted relatively higher salary increase of 11.2%. 

For the Indian ITeS industry, the average increase in salary for 2013 has been projected at 10.1%. BFSI captives and other captives are projecting salary increase at 10.2%. Third party service providers posted an average salary increase of 8.9% on account of tough global economic conditions, depreciating rupee and huge cost pressures. 

A dip in sales for consumer devices as well as the shift to smarter devices and tablets has dampened the mood for the semiconductor industry, which reported salary increase of 11.3%, down from 12.1% in 2012. The high-tech industry posted an average salary increase of 10.5%. 

Despite a year in which India's growth came to a decade low, corporate India reported an average overall attrition of 19.3% for 2012. While the attrition was second highest in ITeS industry, telecom sector had the second lowest rate of exits in 2012. 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%. 

With shrinking salary budgets, organisations are creating sharp differentiation in salary increases between their key talent and the rest of the population. Over the years this gap is widening. This year, key talent (hi-potentials, hi-performers & critical talent) is projected to get an average increase of 14.1%. The report also said that technology and outsourcing sectors have been among the most volatile and will be cautious in the coming year. 

Sandeep Chaudhary, partner - talent & rewards at Aon Hewitt India commented, "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."