According to Towers Watson 2015-16 Asia-Pacific Salary Budget Planning Report says, "India is expected to see an overall projected salary increase of 10.8 per cent. Factoring inflation at 6.1 per cent, the net salary increase in 2016 is expected to be marginally higher at 4.7 per cent as against 4.5 per cent last year, when inflation was at 5.9 per cent."
"The projected higher overall salary increases are despite the fact that around 58 per cent employers in the third quarter are less upbeat on the business outlook for India than they were in the first quarter, the report said. However, the also adds that the inflation will end up eroding much of the increments. "Companies need to be smart about how they use limited salary budgets, because high volatility and talent crunches are causing frequent shifts to pay," Sambhav Rakyan, Data Services practice leader Asia Pacific at Towers Watson, said.
"Employers may be bearish in thinking there is a weak business outlook given the current poor market data, but the case is the opposite for employees, who hold bullish expectations for salary rises. Employers will need to carefully manage employees' longer term expectations, if they are to achieve a content workforce," Rakyan added.
The salary hike will owe to employee levels. Top performs is likely to get higher increases averaging 12.5 per cent, while above average and average performers may get 11 per cent and 9.7 per cent raises, respectively. "To reward employees based on their performance, offers them a great incentive and also reflects growing market maturity. It also shows rising competition for talent," he said.