India Inc will see a 10% median salary hike in 2023, pushed by labour constraints, inflation concerns and an improvement in financial results. Global advisory firm WTW noted that the median increase could translate to 9.8% hikes with sectors like financial services, banking, technology, media and gaming expected to offer the highest increments.
“Salary budgets for employees in India are projected to increase in 2023, mainly influenced by a continuation of the tight labour market and rising inflation concerns,” said the Salary Budget Planning Report by WTW.
According to the study, companies in India are budgeting an overall median increase of 10% for 2023, (translating to an average salary increase of 9.8%) compared with the actual 9.5% increase in 2022.
“2022 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,” said Rajul Mathur, consulting leader India, work and rewards, WTW. The study has 590 participants from India. “Despite the economic headwinds, higher projections for 2023 reflect cautious business optimism and a continued tight labour market,” he added.
WTW found out that corporates had a positive outlook after two years of pandemic and were revising their budgets. More than half (58%) of the employers in India have budgeted for higher salary increase this year compared to last year. About a quarter of them (24.4%) made no change in the budget and only 5.4% have reduced the budget as compared to 2022.
India Inc’s increments are also expected to be highest in the APAC region. China is projected to see an increase of 6%, with Hong Kong at 4.0% and Singapore at 4% next year. But attrition remains a worry amongst the highest in the region at 15.1%, only second to Hong Kong (15.70%)
Amongst sectors-the financial services, banking, and technology, media and gaming are expected to see the highest salary increase at 10.4%, 10.2% and 10% respectively.