Indian companies likely to increase base salaries by 10.5%: Survey

Companies in India are likely to increase base salaries by 10.5% this year and 48% of them plan to increase headcount, according to a survey by consulting firm Mercer.

Last month, ET had reported the findings of Mercer's India All Industries Total Remuneration Survey (of 691 organisations), which the consultancy firm had shared exclusively with the newspaper. The survey's findings were officially released on Thursday.

In 2016, one in two companies is planning to increase headcount with hi-tech, shared services and life sciences leading the pack. The salary increase forecast for 2016 is quite similar to the actual salary increase for 2015.

Among the industries surveyed, the projected salary increase ranges from 10% to 11% overall, with relatively higher increases for the life sciences, IT and chemical industries. Over the years, salary increase differentiation across industries has narrowed down, but there is considerable pressure on talent retention, as budgets remain tight, according to a statement issued by Mercer.

With regard to variable pay, the survey's findings reveal that there is an increase in variable bonus pay across industries, from the actual payout of 14.7% in 2014 to a projection of 15.4% in 2015.

With regard to variable pay, the survey's findings reveal that there is an increase in variable bonus pay across industries, from the actual payout of 14.7% in 2014 to a projection of 15.4% in 2015.

"Largely, the current pay increase points toward an optimistic economic outlook driving positive sentiment, with companies expecting to increase their headcount," said Ruchika Pal, Principal & India TRS Product Leader, Mercer. "The salary forecasts are the lowest for consumer, auto and The salary forecasts are the lowest for consumer, auto and shared services. Companies in India are assertive of their growth plans and will continue to hire, especially engineers and computer science experts."

The overall actual attrition witnessed in 2014 was 12.6%, with the highest attrition reported in the shared services sector at 17.8%, followed closely by the consumer sector at 17.6%.

From a retention standpoint, sales professionals across levels continue to challenge organisations. While hiring, organisations find it hard to attract R&D professionals as well as engineering professionals, the survey showed.

Image credit: Indiatimes