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<ul><li>The global salary forecast by <keyword id="743341" type="PERSON" weightage="20" keywordseo="Korn-Ferry">Korn Ferry</keyword> pegged India’s salary growth at 9.2% in the coming year. </li><li>This is expected to be the highest across Asian countries. </li><li>However, the real-wage salaries in India is anticipated to be constant at 5%, thanks to low <keyword id="22195" type="COMPANY" weightage="20" keywordseo="Inflation">inflation</keyword>.</li></ul>India’s salaried employees may hope for a good summer. The global salary forecast by Korn Ferry, a management consulting company pegged India’s salary growth at 9.2% for the coming year — which is the highest across Asian countries. However, the real-wage salaries in India is anticipated to be constant at 5%, thanks to an estimated 4.2% inflation. 
 
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 “India posted a strong growth despite real wages taking a hit globally. With our current economic scenario and progressive reforms by the government, there is a sense of cautious optimism across sectors in India that continues to show high salary increments. We recommend organizations to re-examine their talent strategies and remuneration and reward policies, considering the rising cost of living, leading to marginal real wage increases,” said Rajiv Krishnan, managing director of Korn Ferry Advisory India. The salaries in India are growing in an inconsistent manner. “Companies will continue to differentiate their top performers, high potentials and critical talent. Given the increasing cost pressures on the businesses, fixed salary sees a slow growth whereas high performers will continue to see a steady growth in total remuneration including performance incentives,” added Roopank Chaudhary, associate client partner at Korn Ferry India. And it will be much higher than the average salary increase in the US — which is at 3%. Globally, Asia is expected to have the highest real wage growth at 3% with the salary forecast to grow by 5.3%. The lowest salary growth is expected in Japan and Taiwan at 2% and 3.9% respectively. “Compensation programmes need to be regularly reviewed to make sure they align with changing business and market conditions. Companies take a broader perspective by defining and agreeing upon their own measures of cost drivers, business strategy and local trading conditions,” said Benjamin Frost, who is the global general manager of Korn Ferry. The report analysed database of over 20 million salaried employees across 25,000 organizations in more than 130 countries. The predictions are as per the trends for 2019, taking into account inflation and other growth factors. See also: <a href="https://www.businessinsider.in/careers/news/indians-are-unhappy-with-their-pay-but-satisfied-with-their-jobs/articleshow/72055840.cms">Indians are unhappy with their pay but satisfied with their jobs</a> <a href="https://www.businessinsider.in/careers/news/more-women-are-drawing-salaries-in-india-but-the-gender-pay-gap-persists/articleshow/72236452.cms">More women are drawing salaries in India but the gender pay gap persists</a> <a href="https://www.businessinsider.in/indian-employees-are-willing-to-give-up-10-of-salary-for-job-security/articleshow/69839667.cms">Indians are willing to give up 10% of salary for job security</a>

India’s salary growth at 9.2% in the coming year: the salary forecast by Korn Ferry

<ul><li>According to the latest report by AON, 98.9% companies in India intend to give a <keyword id="6355281" type="General" weightage="20" keywordseo="salary-hike" source="Orion">salary hike</keyword> to its employees in 2022.</li><li>The percentage of salary hike given to employees was 8.8% this year, it is projected to increase to 9.4% in 2022.</li><li>Employees with upgraded technical and digital skills are said to be the most successful in 2021.</li></ul>It is projected that 98.9% companies in India will give or intend to give a salary increment to its employees in 2022, according to the latest report by professional services firm AON. This is a jump compared to this year, which saw 97.5% of Indian firms giving a salary hike to its employees. The average percentage of salary increment given to the employees this year was 8.8%. However, the report has forecast an increase to 9.4% in the year 2022. The COVID-19 pandemic may have disrupted people’s lives, but companies say that it has definitely not hampered productivity throughout these 18 months, as per AON. The survey also reveals that around 45.4% of companies saw an improvement in their overall business outlook. This percentage is also projected to further increase to 61.9% in 2022. Therefore, most of the companies decided to give a pay raise and bonuses to its employees. “Despite another wave of COVID-19 hitting the nation hard, Indian organisations have displayed resilience in riding through the tough times. While pandemic risk in India continues, the business sentiment and salary projections for 2022 tell us that employers are building for growth and are much better prepared than in 2020,” said Roopank Chaudhary, partner at AON’s human capital business in a press release. Expected salary increment across various sectors: <div type="image" title="Percentage of salary increment expected in 2022" msid="86008557" hostid="261" caption="&amp;lt;p&amp;gt;Percentage of salary increment expected in 2022&amp;lt;/p&amp;gt;"></div> The graph clearly shows that information technology (IT)/hi-tech, professional services and ecommerce are the top three sectors with the highest salary increase in 2022 for India. As the hospitality sector was one of the most affected sectors during the pandemic and is still recovering from the losses, it is one of the sectors with least salary increments projected for 2022. Other than the hospitality sector, engineering services and energy sector will have low salary increments for 2022. Another notable aspect is that the number of organisations choosing not to give an increment may also decline from 2.5% to 1.1%, which means that there will be very few companies that might not give an increment next year, according to the report. Chaudhary further said that the employees with digital and technological skills are the “most successful” in 2021. The salary increment trend was seen mostly for the employees who had updated skills according to the trend going on in the market. He also added, “We expect that this trend will intensify over time, as organisations have an increased need for this talent to transform their business models and build resilient workforces.” SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/careers/news/cuemath-toppr-aakash-institute-and-many-more-are-looking-for-online-tutors/articleshow/85979681.cms">Cuemath, Toppr, Aakash Institute and many more are looking for online tutors</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/logistics-company-delhivery-raises-76-million-ahead-of-its-ipo/articleshow/85997440.cms">Former Tiger Global exec Lee Fixel picks Delhivery as his second bet in India, after InShorts</a>

IT, HR and ecommerce employees will get the biggest pay hike next year

<ul><li>‘Digitally skilled’ employees and those working in areas of data science, artificial intelligence and machine learning, are expected to receive higher increments. </li><li>In an interview with Business Insider, <keyword id="203878" type="PERSON" weightage="20" keywordseo="Ajay-Shah">Ajay Shah</keyword>, VP and head of recruitment at <keyword id="6381892" type="COMPANY" weightage="20" keywordseo="TeamLease-Services">TeamLease Services</keyword> said that the salary hikes can be around 14-18% for digital roles. </li><li> It is safe to say that the top skills fetching higher salary increment would be big data analytics, digital <keyword id="6373689" type="UNKNOWN" weightage="20" keywordseo="Cloud-computing">cloud computing</keyword>, artificial intelligence, cyber security and machine learning.</li></ul>With the appraisal season around the corner in April, employees are waiting with bated breath. However, they may not be as attractive now as before, with few sectors expected to dish out double digit increments. Only ‘digitally skilled’ employees will not have little to worry about, especially working with data science, artificial intelligence and machine learning. “The median salary hike at the organisational level will fluctuate between 8% to 14% this year. However, the salary hikes across the digital areas will vary from 14% to 18%,” said Ajay Shah, VP and head of recruitment at TeamLease Services in an interview with Business Insider. According to Shah, salary hikes in the digital areas will outshine the average hikes across industries. Skills are the most in demand for recruiters are also popular with companies which want to retain them. And, these skills are big data analytics, digital cloud computing, artificial intelligence, cyber security and machine learning. While the IT industry continues to grow, doling out higher pay packets and <keyword id="1458566" type="PERSON" weightage="20" keywordseo="digital-skills">digital skills</keyword>, the ecommerce and professional services sector are also expected to witness above average increments. Amongst sectors, those will offer little are those in trouble like automobile and telecom companies. Skills versus salaries Apart from slowdown and other financial troubles, companies might also be taking a chunk of funds intended for hikes and divert them to re-skilling. Shah believes that the enterprises in India are now striving to become ‘tech- enabled’ for better productivity. Hence, they are investing in reskilling their employees via learning and development initiatives. This might also impact the salary hikes of the digitally unskilled. “Freshers are going ahead with average starting salaries and the mid-level employees have aspirations. But, there is a skill gap. So, organisations investing in reskilling programmes is also a kind of incentive to the employees,” Shah reiterated. Increments to touch a decade-low A survey by Human Resource firm <keyword id="6462982" type="COMPANY" weightage="20" keywordseo="aon-hewitt">Aon Hewitt</keyword> pegged the average pay hike at 9.1% in 2020. That happens to be the lowest in a decade. It anticipates the increments in the ecommerce and professional services space at 10%. Last year, the average increment stood at 9.3%. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[
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 "Despite economic challenges in 2019, organizations in India are taking a positive view. Pay increases in India continue to be the highest in the region. A big reason for India's higher salary increase, as compared to other growing economies, is the high inflation rate and the war for key talent and niche skills," <a href="https://www.livemint.com/news/india/indian-firms-may-offer-9-1-pay-hike-lowest-in-decade-11582022153432.html">said</a> Tzeitel Fernandes, Partner, Rewards Solutions at Aon. The <a href="https://www.businessinsider.in/careers/news/the-salary-hikes-in-india-will-be-the-best-in-asia-next-year-but-inflation-will-eat-most-of-it/articleshow/72332600.cms">global salary forecast by Korn Ferry</a>, a management consulting company also projected India’s salary growth at 9.2% — the best in Asia. That is much higher than the average salary increase in the US at 3%. However it needs to be mentioned that inflation in India and developed economies are not comparable. “Compensation programmes need to be regularly reviewed to make sure they align with changing business and market conditions. Companies take a broader perspective by defining and agreeing upon their own measures of cost drivers, business strategy and local trading conditions,” said Benjamin Frost, who is the global general manager of Korn Ferry. See also: <a href="https://www.businessinsider.in/careers/news/indian-startup-dream11-offers-as-much-as-270-hike-in-salary-for-a-job-well-done/articleshow/73068468.cms">This Indian startup offers as much as 270% hike in salary for a job well done</a> <a href="https://www.businessinsider.in/careers/news/these-are-the-starting-salaries-offered-to-b-school-students-in-india/articleshow/74168696.cms">These are the starting salaries offered to B-school students in India</a> <a href="https://www.businessinsider.in/business/news/india-inc-to-offer-double-digit-salary-hike-this-year-timesjobs-survey/articleshow/74210093.cms">India Inc to offer double-digit salary hike this year: TimesJobs survey</a>

Don’t expect more than 10% salary hike this year unless you are an AI expert

<ul><li>Employees in India should see 10% hike in salaries in 2019, the highest in Asia, predicts the Korn Ferry 2019 Global Salary Forecast. </li><li>However, when adjusted for inflation, real wage growth for India will be only 5%. </li><li>Overall, Asia will witness the best salary growth after taking inflation into account.</li></ul>Salaries in India are projected to increase by 10% in 2019, the highest in Asia, according to latest <a href="https://engage.kornferry.com/Global/FileLib/Pay/KF_2019_Salary_Forecast_Main_Infographic_Aw.pdf">the Korn Ferry 2019 Global Salary Forecast</a>.However, when adjusted for inflation, the rise in real wages will only be 5%. India is widely expected to be Asia’s fastest-growing economy this year, with Asia expected to lead the world in real wage growth. When adjusted for inflation, Asian employees can expect their l salaries to grow by 2.6% in 2019 according to the forecast. The real wage growth in Asia’s largest economy, China, is forecasted at 3.2%. For the other Asian economies the report forecasts growth at: Vietnam (4.8%); Thailand (3.9%); Indonesia( 3.7%); Malaysia (3.6%); and the Philippines(1.7%). Globally, the salaries are expected to grow at a paltry 1% on average while the gross wage <a href="https://www.kornferry.com/institute/salary-forecast-2019">increase</a> is forecast at 5.1%. That is a sign that reflects higher global inflation on average. “The percentage of salary increase or decrease will vary by role, industry, country and region, but one thing is clear, on average, employees are not seeing the same real pay growth they did even one year ago,”<a href="https://www.kornferry.com/institute/salary-forecast-2019"> said </a>Bob Wesselkamper, Korn Ferry’s global head of rewards and benefits solutions This forecast uses data drawn from Korn Ferry’s pay database which contains data for more than 20 million job holders in 25,000 organizations across more than 110 countries and the uses inflation forecasts from the Economist Intelligence Unit. Another report has predicted positive momentum in India’s salary growth. According to the latest <a href="https://www.willistowerswatson.com/en-IN/press/2018/10/India-to-see-a-10-percent-salary-increase-in-2019">Q3 2018 Salary Budget Planning Report</a> by Willis Towers Watson, India will show high salary increments by 10% mainly because of progressive reforms, constant economic growth and cautious approach of different sectors. That report further projected that the pharmaceutical sector will witness the highest salary increase in 2019 at 10.3% whereas the salaries for consumer and retail sector will remain at 10%. The financial services sector, meanwhile, will witness growth to 9.6% in 2019, up from 9.1% in the previous year. See also: <a href="https://www.businessinsider.in/india-has-a-booming-artificial-intelligence-sectorand-its-struggling-to-fill-over-4000-jobs/articleshow/67154961.cms">India has a booming artificial intelligence sector—and it’s struggling to fill over 4,000 jobs</a> <a href="https://www.businessinsider.in/nearly-half-of-the-companies-in-india-may-increase-hiring-in-2019-report/articleshow/67023188.cms">Nearly half of the companies in India may increase hiring in 2019: Report</a> <a href="https://www.businessinsider.in/markets/economy/india-witnessed-its-highest-unemployment-rate-in-27-months-at-7-38-in-december-says-cmie/articleshow/67418218.cms">India witnessed its highest unemployment rate in 27 months at 7.38% in December, says CMIE</a>

Salaries in India projected to rise by 10% this year — but there’s a catch

<ul class="summary-list"><li>Asking for a raise in an uncertain economy like this one can be daunting.</li><li>Insider spoke with six experts to help you formulate your game plan.</li></ul>Asking your boss for a raise is daunting when <a href="https://www.businessinsider.com/half-of-americans-say-financial-position-has-worsened-gallup-poll-2023-2">the direction of the economy is in question</a>.But experts say that even in <a href="https://www.businessinsider.com/ceos-recession-global-economy-layoffs-inflation-davos-2023-1">an uncertain economy like this one</a>, most employers are apt to retain and reward their top talent. After all, hiring is still a challenge and <a href="https://www.businessinsider.com/layoffs-sweeping-the-us-these-are-the-companies-making-cuts-2023">while some people are losing their jobs</a>, the quit rate — <a href="https://www.businessinsider.com/great-resignation-still-going-layoffs-low-job-openings-quits-high-2022-11">the number of workers voluntarily leaving their roles</a> — remains high."If there's been significant turnover at your organization — whether voluntary and involuntary — your company may be worried about retaining you," Roy Cohen, author of "Wall Street Professional's Survival Guide" and a career coach, told Insider. "You have a lot of value."Overall raises are forecast to be 4.6% in 2023, <a href="https://www.wtwco.com/en-US/News/2022/11/us-pay-increases-to-hit-4-point-6-percent-in-2023-wtw-survey-finds" target="_blank" rel="noopener">according to a report that</a> WTW, a business consulting company, published late last year. The report was based on a survey of 1,550 organizations that WTW conducted in October and November of 2022.If you're going to ask for a raise, you need a game plan. Insider spoke with six experts on how to figure out when to make the ask, how best to make the case to your boss, and what to do if you don't get the answer you want.<h2>Find your time</h2>There's a misconception that you need to have gotten a promotion or completed something "really big" at work to even ask for a raise, Liz Tilia, the career expert and founder of a career and life coaching business, Fem Home Ec., <a href="https://www.businessinsider.com/how-to-control-your-career-in-a-recession-2022-7">previously told Insider</a>. In reality, incremental progress is often how people grow in their roles and it should be rewarded, Tilia said. As long as you can justify your reasoning with a proven track record of how you used your skills to make the company better — more profitable or more competitive — you have a case. That said, milestones can be helpful: asking for a raise on the heels of a newly completed successful project bolsters your position.Asking for a raise can also be a matter of timing and when you need to make more money, said Kelly Lannan, a senior vice president at Fidelity. It can be nerve-racking to ask for more money, but at a time <a href="https://www.businessinsider.com/us-inflation-is-slowing-down-even-faster-cpi-2023-1">when inflation is affecting Americans' cost of living</a>, it's not something to be embarrassed about. The key to landing a raise is understanding your company's promotion cycle and performing well, according to Julia Firestone, a career coach and consultant."If you've met all of your goals and gone beyond them, I think it's appropriate to express that you'd like to talk about a raise really any time," she said. <h2>Do your due diligence</h2>Next, you need to develop an understanding of your value in the job market, Tilia said. Data is key. Experts recommend comparing your job description with your workload and responsibilities, as well as other companies' listings for similar positions. Additionally, look at pay data for your job title on websites such as Glassdoor and Indeed, which have a trove of employee-reported salary ranges and estimates. "Treat the act of asking for a promotion like a project," Sarah Doody, the founder of the job search and career accelerator company Career Strategy Lab, told Insider. Based on the research you do for this "project" prepare a presentation, she said. Your presentation should highlight the value you've added to your company, and provide evidence of this contribution, she said. One way to identify the achievements and the progress you've made since starting in your position is to update your résumé, Doody added. Many people join a company in a role and at a pay level that, eight to 12 months later, doesn't reflect the level of work they are doing, Tilia said. This happens more frequently in a high-turnover job market because employees might not always get replaced right away. "You were hired as a coordinator, now you're acting as a manager, but you still have the coordinator title and pay," she added. So, you need to ask your boss to be compensated and titled as a manager, she said. As you make the ask, Tilia recommended not using the word, "raise," but rather, "title and pay adjustment." Semantics are important. <h2>Make your pitch</h2>Your case for a raise involves a mix of metrics that show your value, actions that demonstrate your commitment to your job, and a bit of horn-tooting — or what Cohen refers to as "personal evangelism." In a softening economy, it's also important to show that you know what's what, he said. If your company has recently had layoffs or experienced heightened turnover, you need to show how the <a href="https://www.businessinsider.com/quiet-hiring-work-job-workers-recession-economy-employees-2023-2">loss of your colleagues has expanded your work</a>.He recommended saying something like: "I love what I do and I hope you agree I'm doing it well. Now that my position has been saved, but others have been terminated, my workload has increased. I hope that some of those cost savings can be diverted to me."Be prepared to show proof of your productivity — and for pushback. Your boss might tell you that you're lucky you still have a job. "But remember, you have leverage," Cohen said. "If what you're doing is valuable to your organization, you're likely to be valuable elsewhere."<h2>If at first you don't succeed…</h2>You might not get the raise that you want. If the answer is no, experts advise asking for feedback about the specific things you need to do to achieve the level of performance that warrants a raise. Also ask for a follow-up meeting on the topic, advised Tori Dunlap, a personal finance expert and founder of a consultancy that helps women reach pay parity, Her First 100K. She <a href="https://www.businessinsider.com/how-to-ask-for-a-raise-based-on-inflation-2022-4">previously </a>recommended, saying something like: "Thank you for having this conversation with me. I would love to set a time to revisit this conversation. Would the end of next quarter be a possibility?" When an immediate raise is not in the cards, Doody recommended countering with requests for different types of perks. You might, for example, negotiate a professional development budget, more work-from-home days, or a gym membership, she said. Remember, too, that getting a "no" isn't a reflection of your professional worth. "So many people take these rejections so seriously," Doody said. "But a lot of times employees are not privy to the financial reasons why they can't offer you a raise right now." An earlier version of this story appeared on September 20, 2022.

How to ask for a raise in an uncertain economy

<ul><li>After a blockbuster third quarter, analysts are bullish on the performance Indian IT companies between January to March as well.</li><li>Tata Consultancy Services (<keyword id="6357150" type="ORGANIZATION" weightage="20" keywordseo="tcs">TCS</keyword>), HCL Technologies, <keyword id="6354512" type="COMPANY" weightage="20" keywordseo="Infosys">Infosys</keyword> and others are expected to report the best fourth quarter in the last five years.</li><li>After Accenture’s increase in guidance, analysts are watching Indian players to see how they change their revenue outlook for the future.</li></ul>As 2021 unfolded, India’s information technology (IT) services majors including Tata Consultancy Services (TCS), HCL Technologies, Infosys, <keyword id="10862" type="CITY" weightage="20" keywordseo="Wipro">Wipro</keyword> and Tech Mahindra — the top five players in the software and services industry — reported the best quarter in a decade. It turns out that the market expects the following three months, January to March 2021, to be as exciting, if not better. This would be the best fourth quarter for the top-tier IT giants in the last five years, the analysts at Motilal Oswal said in a report dated April 4. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Broking firm </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Jan-March growth estimate for tier-I IT companies </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Motilal Oswal </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2.5% to 3.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ICICI Direct </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3% to 4.5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HDFC Securities </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3.9% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Edelweiss </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2% to 6% </td></tr></tbody></table>Growth estimates are in comparison to the earnings for the quarter ended December 2020 The consensus among IT analysts is that the previous record will be broken. After Accenture raised its full year guidance from 4-6% to 6.5-8.5% in US dollar terms, all eyes are now on how good the outlook is for others. “The upward guidance revision by IT companies three quarters ago would be followed by upgrades in consensus forecasts for quarters to come,” said financial services firm Edelweiss in its April 1 report. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Annual revenue guidance for FY21 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">TCS </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Does not give guidance </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HCL Tech </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2-3% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Wipro </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1.5-3.5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Infosys </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">4.5-5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Tech Mahindra </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Has not shared guidance </td></tr></tbody></table> Not only are these companies continuing to rake in new deals, but a strong dollar⁠ — 2.99% rise in the value of the greenback in the last one year ⁠— means they will be pulling in higher revenue in rupee terms. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">New deals from January to March 2021 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">TCS </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Vodafone, ThreeUK, Skanska </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Infosys </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Siemens, Toyota, Newmont, Google </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HCL Tech </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Airbus, Tenneco </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Wipro </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Capco, Ampion, Telefonica, Estee Lauder </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Tech Mahindra </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Telefonica, Perigord </td></tr></tbody></table>Source: Media reports The impact of wages hikes TCS, <keyword id="141968" type="CITY" weightage="20" keywordseo="HCL-Tech">HCL Tech</keyword>, Infosys and Wipro are likely to register a decline in margins due to the wage hikes announced between January and March. Margins may also bear the impact of employees slowly returning to offices as the hybrid work model comes in play. This includes higher offshoring, lower subcontractor costs and structurally lower travel and marketing costs. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Wage hike </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Time of roll out </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">TCS </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6-8% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">March 2021 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HCL tech </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹700 crore bonus </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">February 2021 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Infosys </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">100% variable pay, salary increments and promotions </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">January 2021 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Wipro </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Wage hikes for junior employees </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">January 2021 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Tech Mahindra </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Salary hike </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">January 2021 </td></tr></tbody></table> Meanwhile, the pandemic and the demand for contact-less solutions, both on the employee and customer front, are continuing to move up timelines of digital transformation. “Strong need for digital transformation, not only to structurally cut costs but also to deliver contact-less consumer and employee experiences,” said Nirmal Bang in its report dated March 19. The stocks of TCS, HCL Tech, Infosys and others have already clocked in a greater quarter between January and March on the back of digital transformation and deal wins. Going forward, guidance may be the differentiating factor for where the share prices will be heading next. <div type="image" title="Copy of wipro share price(1)" msid="81908773" hostid="261" caption="&amp;lt;p&amp;gt;Nify IT movement between January to March&amp;lt;/p&amp;gt;"></div> SEE ALSO: <a href="https://www.businessinsider.in/india/news/heres-a-look-at-what-is-allowed-and-what-is-not-allowed-during-the-maharashtra-lockdown-again/articleshow/81907207.cms">Here’s a look at what is allowed and what is not during the weekend lockdown and night curfew in Maharashtra</a> <a href="https://www.businessinsider.in/tech/mobile/news/lg-electronics-exits-smartphone-business-world-wide-lg-smartphone-timeline-history/articleshow/81908186.cms">LG Electronics exits the smartphone business – here’s how its mobile fortunes swayed over the last two decades</a> <a href="https://www.businessinsider.in/business/startups/news/pepperfry-co-founder-ashish-shah-gets-candid-about-its-ipo-plans-says-profitability-is-right-around-the-corner/articleshow/81908005.cms">Pepperfry co-founder gets candid about its IPO plans, says profitability is right around the corner</a>

Record breaking quarter for Indian IT services is a given ⁠— all eyes are now on guidance

<ul><li><keyword id="6357150" type="ORGANIZATION" weightage="20" keywordseo="tcs">TCS</keyword> is gearing up to make its new 25/25 secure borderless workplace (SBWS) model the ‘new normal' by 2025.</li><li>Currently, 90% of its employees are working from home.</li><li>According to the company, this model will enable a 25% increase in throughput and estimates that it won't need more than 25% of its workforce in the actual offices to be 100% productive.</li><li>ICICI Direct forecasts that this will allow TCS to differentiate itself in the market.</li></ul>'Working from home' will be the new normal for the employees of India's largest IT company, Tata Consultancy Services (<a href="https://www.businessinsider.in/business/corporates/news/tcs-earnings-q4-2020-profits-margins-and-revenue/articleshow/75182689.cms">TCS</a>), even after the lockdown comes to an end. By 2025, only 25% of employees will be needed in office at any given time and offices will only need 25% of their total strength on any given day. Its CEO Rajesh Gopitnathan believes that the crisis has actually been good as it forced them to shift to the next phase of their operating model. "It's about time. Our current operating model is currently a 20-year-old legacy. In some ways, this crisis actually leapfrogs us into a new model,” he said during the <a href="https://www.businessinsider.in/business/corporates/news/tcs-earnings-q4-2020-profits-margins-and-revenue/articleshow/75182689.cms">fourth-quarter earnings call</a>. The new secure borderless workspaces (SBWS) model will increase the company's velocity or throughput by 25%, according to TCS' chief operating officer N Ganapathy Subramaniam. "We don’t believe that we need more than 25% of our workforce, at our facilities, in order to be 100% productive," he said during the earnings call. What this essentially means is that TCS is going to make <keyword id="123591" type="PERSON" weightage="20" keywordseo="Work-from-home">work from home</keyword> the new normal once the <keyword id="8829783" type="UNKNOWN" weightage="20" keywordseo="coronavirus-pandemic">Coronavirus pandemic</keyword> blows over. Although, that's hardly surprising since fewer employees in the office could result in more savings as many <a href="https://www.wbur.org/hereandnow/2019/07/23/work-from-home-benefits">studies</a> show. "Our proven business continuity processes got enhanced and securely, from 100% work from approved facilities to 90% operating remotely and securely connecting to our clients and TCS systems and networks.," said the company in a statement. How did <keyword id="1754604" type="PERSON" weightage="20" keywordseo="coronavirus">Coronavirus</keyword> inspire TCS' new workspace model? The Coronavirus pandemic may have forced the IT company to suddenly push their employees to work from home, but according to Gopinathan, the shift has been in the works for a while. "For the last few years, we have actually been pushing the concept to its next evolutionary path by what we call the open agile workspace concept,” he said. With the ongoing health crisis, TCS was forced to switch all the elements of its operating model. To not just SBWS, but also to the extended environment. "This is not just about moving the person out from the office and allowing a laptop or a desktop located in the house to connect,” Gopinathan explained. He claims that other than the fact that the person has actually shifted out, no other perceptible reduction in quality or certainty has been noticed by the company's clients. It will be the ‘new normal' even after the pandemic Even after the Coronavirus pandemic comes to a close and the lockdown is over — TCS plans to continue with their SBWS model. "We're not going to go back to where we were. The reason we have been able to get on top of it is that we had invested in building those processes and systems,” said Gopinathan. Over the past few weeks, TCS claims that they released they don't need to have more than 25% of their workforce in the office in order to be 100% productive. "We don't believe that every employee needs to be present all the time at our offices. I think it's sufficient that they spend 25% of their time in the office,” said Subramaniam. "We also believe that 25% of the project team may not be located in one single location,” he added. ICICI Direct forecasts that this will put TCS in a position to provide a unique differentiation of its services, setting it apart from the rest of the industry. Currently, more than 90% of the company's employees are working from home. The model is going to put us a much better position to capture demand as customers are moving towards resilience and agility in the post-Covid scenario. "TCS does not see milestones slipping at this point of time,” said Nirmal Bang's report on the TCS' fourth-quarter earnings. According to Gopinathan, this does not mean that people will lose their jobs. Being loyal to its talent is once of the ‘core principles' of the company and they plan to <a href="https://www.businessinsider.in/business/corporates/news/tcs-earnings-q4-2020-profits-margins-and-revenue/articleshow/75182689.cms">stick to it</a> in the coming days. In addition to honouring the offers made to freshers, TCS will also be promoting its employees. "We also want to reaffirm that our loyalty to our employee base is total. We don't see any form of retrenchment or any such activity happening due to the cause of the Coronavirus, which will only accelerate in the coming few weeks and months,” he said. However, there will be no salary increments this year. Note: The article was edited to reflect that 25% throughput is expected to increase once the new 25/25 model is in place, not a 25% increase in efficiency. See also: <a href="https://www.businessinsider.in/business/corporates/news/wipros-hiring-will-be-slower-in-the-coming-months-and-current-employees-may-be-asked-to-go-on-leave-without-pay/articleshow/75173292.cms">Wipro's hiring will be slower in the coming months and current employees may be asked to go on leave without pay</a> <a href="https://www.businessinsider.in/policy/economy/news/india-unemployment-job-losses-at-many-companies/articleshow/75130701.cms">India's looming jobs crisis is starting to unravel within the first 21 days of coronavirus lockdown</a>

TCS CEO says the business model is 20 years old — hinting that it may be time to go employee-lite

<ul class="summary-list"><li><keyword id="11894140" type="UNKNOWN" weightage="60" keywordseo="inflation" source="Orion">Inflation</keyword> is the rising cost of goods and services over time.</li><li>A change in inflation is caused by a number of factors, such as increases in the cost of production or spikes in demand.</li><li>Inflation is measured on a monthly basis using the Consumer Price Index.</li></ul>From used cars to the housing market, the stock market, and beyond, inflation has always played a major role for consumers and investors alike. This is because as prices rise over time the buying power of your dollar slowly decays. But the rise and fall of inflation can occur for different reasons depending on the state of the <keyword id="11893570" type="UNKNOWN" weightage="100" keywordseo="economy" source="Orion">economy</keyword>. So, what are the major causes of inflation and how is inflation measured?<h2>What is inflation? </h2><a href="https://www.businessinsider.com/what-is-inflation" target="_blank" rel="noopener">Inflation</a> is the increase in the price of goods and services over time. Inflation causes your buying power to erode, meaning that the same dollar today buys less in the future. "The simple story is too much money chasing too few goods and services," says Dean Baker, senior economist at the Center for Economic and Policy Research. The US Bureau of Labor Statistics (BLS) measures the inflation rate using the <a href="https://www.businessinsider.com/consumer-price-index" target="_blank" rel="noopener">Consumer Price Index</a> (CPI) and <a href="https://www.bls.gov/" target="_blank" rel="noopener">publishes this data</a> each month. Quick tip: Inflation is known as a lagging indicator, which means that it provides information on something that has already occurred and is used to confirm information as opposed to forecasting. <h3>Current inflation rate</h3>According to the <a href="https://www.bls.gov/news.release/cpi.nr0.htm" target="_blank" rel="noopener">Bureau of Labor Statistics</a> (BLS), inflation increased 0.8% in February 2022. Because this is a lagging indicator, the most recent inflation statistic will always be the previous month. Over the last 12 months, all items index increased 7.9% before seasonal adjustment. To calculate inflation we begin with a "market basket" of goods and services. The price level of this "market basket'' is what is measured from month-to-month. This basket is meant to capture a portion of the items and services that urban households typically consume, but it is not meant to be all encompassing. Using that market basket, the consumer price index is created and the current value of the market basket is determined by adding each of the totals. The next step is to compare the cost of the current market basket of items to the same market basket of items in what is called a base period. Inflation is then calculated from the change in the price level from the market basket of goods in the base period compared to the market basket of goods in the most recent period. For example: If the CPI is 255 in March 2021 and rose to 260 in March 2022, this would mean that inflation was 1.9% over that 12-month span. Quick Tip: CPI isn't the only index economists use to gauge inflation. There's also the Producer Price Index (PPI), which tracks the prices of input goods by businesses. The Personal Consumption Expenditures (PCE) index measures the price of goods and services purchased by consumers. PCE and CPI are differentiated by the types of goods and services that are excluded from the index. The Bureau of Labor Statistics provides the CPI while the Bureau of Economic Analysis provides the PCE.<h2>What causes inflation? </h2>Inflation can be caused by multiple factors with demand-pull and cost-push inflation among the most common. However, the causes of inflation in 2021 are a bit more complex and have been caused in part because of the government's response to the pandemic, in addition to sudden increases in demand as coronavirus lockdown restrictions faded and as labor shortages occurred across the country. Here are the major causes of inflation:<h2>1. Demand-pull inflation</h2>Demand-pull inflation happens when the demand for certain goods and services is greater than the economy's ability to meet those demands. When this demand outpaces supply, there's an upward pressure on prices — causing inflation. A practical example of this would be tickets to see Hamilton live on Broadway. Because there were a limited number of seats and the demand for the live show was far greater than capacity, the price of tickets skyrocketed approaching <a href="https://www.businessinsider.com/hamilton-musical-revenue-facts-2016-4" target="_blank" rel="noopener">$2,000</a> on third party sites, well above the standard ticket price of $139 and premium ticket price of $549 at the time. <h2>2. Cost-push inflation </h2>Cost-push inflation is the increase of prices when the cost of wages and materials goes up. These costs are often passed down to consumers in the form of higher prices for those goods and services. An example of this would be lumber, as lumber is an input good for houses. When the cost of lumber spiked as much as <a href="https://markets.businessinsider.com/news/stocks/lumber-price-outlook-futures-shortage-demand-commodity-inflation-2021-6" target="_blank" rel="noopener">400%</a> earlier in 2021 it had an impact on the increase in housing prices resulting in inflation. <h2>3. Increased money supply </h2>Increased money supply is defined as the total amount of money in circulation, which includes cash, coins, and balances and bank accounts according to the Federal Reserve. If the money supply increases faster than the rate of production, this could result in inflation, particularly demand-pull inflation because there will be too many dollars chasing too few products. An increase in money supply is usually created by the Federal Reserve through a process called Open Market Operations (OMO). <h2>4. Devaluation</h2>Devaluation is downward adjustment in a country's exchange rate, resulting in lower values for a country's currency. The devaluation of a currency makes a country's exports less expensive, encouraging foreign nations to buy more of the devalued goods. Devaluation also makes foreign products for the devaluing country more expensive which encourages citizens of the devaluing country to buy domestic products over foreign imports.China is perhaps most known for this tactic as the United States and other nations have frequently accused China of working to <a href="https://www.businessinsider.com/what-chinas-yuan-devaluation-means-2015-8" target="_blank" rel="noopener">devalue the Yuan</a> over the years.<h2>5. Rising wages </h2>Rising wages is exactly what it sounds like — an increase in what's being paid to workers. "Wages are a cost of production," adds Baker. "If wages rise a large amount, businesses will either have to pass the cost on, or live with lower margins. The exception is if they can offset wage growth with higher productivity." However, economists remain mixed on the impact of gradual increases in wages, like raising the minimum wage, compared to faster, more sudden wage growth seen in places like Silicon Valley. Some believe that an increase in wages could result in cost-push inflation due to the higher cost to businesses, while others believe that higher wages across the board (not just concentrated in certain sectors) will also increase demand enough to offset a spike in prices. "Rising wages should allow consumers to combat inflation, especially if the wages are rising at the same or a faster rate than the inflation rate," adds Susane L. Toney, Ph.D, endowed chair of Business and Economics at Hampton University. "The rising wages allow consumers to pay higher prices without impacting their purchasing power."<h2>6. Policies and regulations</h2>Certain policies can also result in either a cost-push or demand-pull inflation. When the government issues tax subsidies for certain products, it can increase demand. If that demand is higher than supply, costs could rise. Additionally, stringent building regulations and even rent stabilization policies could inadvertently increase costs and create an inflationary environment by passing those costs to residents or artificially reduce the supply of housing. <h2>The financial takeaway</h2>Inflation, generally around 2% per year, is a normal part of our economic system. Under normal financial circumstances, this means that your money is worth less each year, unless it is gaining an interest rate greater than or equal to inflation. To ensure that your money is keeping pace with inflation, consider annual salary increases or cost of living adjustments by your employer. If you're an entrepreneur, consider raising your rates incrementally. On the consumer side: "Remember that inflation is typically uneven," adds Baker. "Some prices rise rapidly, while others can be stable or even falling." This may be an opportunity to save money by waiting for better prices or finding a substitute item or service.Investing your money is also an effective tactic to beat inflation as well. "The interest rates they earn on their savings accounts will not likely cover the rising prices. The only caveat is if they have funds invested that are earning a higher rate of return than the inflation rate," says Toney. Treasury Inflation-Protected Securities (also known as TIPS) are bonds issued by the US Treasury that adjust in value based on the CPI. Other hedges for inflation may include corporate bonds and dividend paying stocks and index funds. Important: TIPS pay a fixed rate of interest semi-annually and are issued in 5, 10, or 30 year durations.

What to know about the 6 main causes of inflation

Financial institutions in India continue to be at the bottom of the list of sectors paying the lowest salary hike to their employees, as per Aon Hewitt recent annual salary increase survey. The sector has seen a drop from 9.5% to a 8.1%. 
 
According to Roopank Chaudhary - Associate Partner &amp; Head, McLagan India, there has been a signficant drop since last year, yet it's not as bad as it looks. "This figure can be justified as demonetisation has hit this sector badly compared to others," he said. 
 
Here's a sector-wise analysis of financial institutions, by Roopank: 
 
Banking "With sister industries like the Small <keyword id="25455" type="ORGANIZATION" weightage="20" keywordseo="finance">Finance</keyword> Banks coming to life and certain NBFCs feeding off the increasing GNPA figures (GNPA as of June 2016 for public and private sector banks was approximately Rs 6 lakh crore) from the Banks to 5 major multinational banks downsizing their operations in India. The year has seen several regulatory measures to supervise the mis-selling of financial products/services, cyber security especially and as a broad measure to create a customer-friendly banking environment," he said. 
 
Two major moves that have been taken as an effort to make the banking space more customer oriented is the large investment in technology as well as the focus on ‘financial inclusion’. Both these initiatives have further been backed by the government through the ‘demonetization’ movement or setting up of Unified Payment Interface (UPI) in August 2016 acted as the impetus and propaganda for retail customers to bank through online channels. 
 
On the other hand, large multinational banks have downsized their operations in India due to tight regulations and need for capital in their domestic markets. Some have even quoted that the reason for shutting down branches is the change in the consumer patterns of banking online. Such a shift could is also reflected in the overall salary increase projected for 2017 at 7.9%, a figure lower than the optimistic projections till last year. But this decrease in the overall salary increase could also suggest that the firms may look at targeting the high performing employees with a higher percentage of the kitty. In fact, Banks have differentiated strongly between average and high performers with the multiplier being 1.81x in 2016. With an overall attrition rate of 16.7% in 2016 induced due to many of the reasons above, there is a need for banks to differentiate basis performance especially in key verticals such as risk, compliance and analytics. 
 
<keyword id="48051" type="ORGANIZATION" weightage="20" keywordseo="investment-banking">Investment Banking</keyword> 
Investment Banking &amp; Capital Markets trends in India remained strong in 2016 despite slowdown globally and in Asia. Overall it was a year of higher M&amp;A activity, buoyant IPOs and nervous FIIs. The outbound deals picked up impressively in 2016, and a lot of activity in start-ups was seen. Key sectors that saw outbound activity were Energy &amp; Oil, while Hi-Tech attracted majority of inbound activity. A relatively stable top management of domestic houses ensured business stickiness and top slots of league tables were replaced by these firms. IPOs were up significantly, while QIPs disappointed yet another year. 
 From an HR standpoint, Promotions were marginally up, increases and bonuses were flat. The industry pyramid saw a burgeoning bottom layer on account of fresh hiring. From Equities Markets standpoint, the dwindling margins in Cash Equity Trading for MNCs resulted few ramp-downs and thus change in Equities talent landscape. The global economic anxiety, weak <keyword id="6484188" type="CITY" weightage="20" keywordseo="Sensex">Sensex</keyword> performance resulted into FII volatility &amp; pullouts, and we saw FII pullouts even from Debt market driven by hike in US Fed Rates. Sensex volatility however resulted into higher Trading Volumes and positive trend was seen in promotions and pay increases for Equities Research / Sales &amp; Trading talent base. 
 
Overall, Bulge firms continued to lead the pay levels and bonuses were highest for Investment Banking compared to Equity or Fixed Income talent base. 
 
Funds/Asset Management 
 
With lower bank interest rates and demonetization, the average assets under management (AUM) of the Indian mutual fund industry crossed 17 lakh CR December 31, 2016. Assets managed by the Indian mutual fund industry have grown from INR 13.49 lakh CR in December 2015 to Rs 17.06 lakh CR in December 2016 – a 26% growth in assets over the last year. 
 
Although retail continues to contribute to a significant share in the pie, Institutional Assets grew at a faster rate in 2015-16 as compared to Retail Assets. The overall growth seen in Retail Assets was approximately 13.74% as compared to 18.26% for Institutional Assets – contrary to the trends seen in the previous years. Consolidation continues in this sector, with most of the top 10 mutual funds seeing a growth in AUM as compared to the previous year. 
 
In addition, there have been 7 exits in the space in the past 4 years. This has led to relatively easy talent availability within the Mutual Fund space and has also influenced hiring costs. The salary increments and forecast for this sector have additionally been influenced by Bank backed AMCs saw salary increments moving in line with the parent entity in 2016. Investment teams continue to draw a significant pay premium along with risk, compliance and analytics. 
 
The talent landscape is seeing an increased focus on hiring, training and retaining key talent in niche roles such as relationship management, digital marketing and training the front-line sales force. Asset Management continues to differentiate strongly on talent with the between average and high performers with the multiplier being 1.84x in 2016. 
 
General <keyword id="35450" type="COMPANY" weightage="20" keywordseo="insurance">Insurance</keyword> 
India continues to be one of the most under insured countries in the world as indicated by both penetration and density levels. Despite the penetration levels, general insurance as a sector has experienced exponential growth over the years with a cumulative growth rate (CAGR) of 14% to 15% since the beginning of the decade. The industry continues to expand, with smaller general insurance players registering a faster growth as compared to more established players in the recent past. Liberalization of FDI in the insurance space has also promised to open doors for much needed capital infusion. 
 
Private sector insurers contribute significantly to the pie, accounting for approximately 49% of market share. The growth of the private sector in 2016 was 21% as compared to 7% for public sector insurers. Consolidation in the sector continues with the top 4 players in the sector accounting for over 50% of the market share. 
The positive headwinds and the buoyant growth reflect in the salary increases rolled out in the sector as well. The projections for 2017 stand at 10.3% as compared to 10.4% in 2016. Attrition however continues to remains a key challenge in the General Insurance space with attrition rates for 2016 registering at 20.1%, only marginally lower than the attrition rate for the previous year (21.6%). 
 
Life Insurance 
2016 saw the Life Insurance industry focus towards expanding customer reach through alternate channels, increase number of partnerships on account of open architecture and driving synergies across businesses to control operating expenses. While Agency model still continues to drive New Business Premiums (NBP) across the industry, the fixed cost heavy life-agent model still needs to be fixed. A number of below-the-line campaigns &amp; partnerships has been a key differentiator for Direct Sales channel. Customer Analytics and dedicated campaigns towards improving UI / UX have played a significant role in e-sales fulfillment. Lately, some of the Life Insurance players have also started to look at Insurance Marketing Firms as a lever of growth. As a combined effect of open architecture, increased FDI limits and high operating costs, the industry today is also headed towards consolidation in order to drive synergies across the organization. On the Talent front, the industry has seen slightly conservative annual increments &amp; bonus payouts. While the 2016 actual average increment stands at 8.3%, the projected annual salary increase for 2017 is 8.2%. 
 
The industry however continues to differentiate between top and average performers; differentiation to the tune of 2.26x in 2016 as against 1.96x in 2015. Though attrition rate has dropped as compared to 2015, attrition continues to be a cause of concern for the industry - overall attrition in 2016 being 56.6% as against 47.9% in 2015 
 
NBFC 
It has been a story of two different halves for the NBFC industry in India in 2016 -17. While the first half of the year saw a strong growth in retail credit and a partial reining in of the delinquency rates that have been plaguing the industry for the last few years, the industry suffered a significant setback due to the demonetization of high value currency notes in November 2016. 
 
The initial impact has been due to liquidity crunch that has plagued the rural and cash intensive sectors where NBFCs have had greater exposure. While the government’s decision to give a 60 day grace period for receivables, later extended by another 30 days has come as a big relief for borrowers, collections have been impacted in the short term, as a result of which the companies are looking at a significant impact on the bottom lines in the near future. The fall in property prices across the country has also forced the lenders to reevaluate their portfolio in the LAP /mortgage sector. 
 
However, there are some green shoots in the long term view. The Government’s favorable policies on specific sectors such as affordable housing and rural sector should drive demand for credit in the long term. The NBFC with their better network in semi-urban and rural areas along with the strong customer connect on the ground will be able to take advantage on this in driving the next wave of growth in the sector. 
 
In terms of fixed pay increases, we see a subdued growth in the sector with overall growth of 8.5%, the first time it has fallen below 10% in this decade. This drop is seen across all levels of the organizations; however, organizations may look at variable pay and targeted increase to high performing employees to retain critical employees in these times of uncertainty. 
 <keyword id="113684" type="COMPANY" weightage="20" keywordseo="microfinance">Microfinance</keyword> 
 
It’s been a year of ups and downs for the micro-finance industry. With some MFIs commencing their small finance bank business, the industry has also shown signs of overheating with around 1.26 million microfinance borrowers with top-up loans have an average loan exposure of INR 45,400, much higher than the national average of INR 22,000. However, the biggest impact to the industry has been in the form of deferred payments from borrowers on account of Demonetization. The industry’s PAR has increased significantly due to lack of cash in the hands of its borrowers. Despite a stressed quarter largely on account of demonetization, the industry promises a positive outlook with quick recovery in the short term. 
 
Given the economic conditions and deferred cash flow, the industry may see conservative annual increments &amp; bonus payouts at the end of this financial year. While the 2016 actual average increment stood at 10.8%, the annual salary increase may fall down to 7.1% (projected). Top Executives / Senior Management may see an even sharper drop in increments with projected annual increment for Senior Management coming down to the tune of 5.4%. Overall attrition in the industry has also gone up; the industry projects an attrition rate of around 29.2% by end of this financial year.

India's financial institutions were hit hard by Modi's demonetisation move, but here's why BFSI still managed to sail through

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div></div></div>The US wage growth debate comes to a head on Thursday with the release of the <a href="http://www.businessinsider.com/employment-cost-index-baml-outlook-2015-4">Q1 employment cost index (ECI) report at 8:30 p.m. ET</a>."The ECI often is considered the best overall measure of labor costs because it includes other forms of compensation besides hourly pay (such as commissions) as well as benefit costs (which account for more than 30% of the total)," <a href="http://www.businessinsider.com/monday-scouting-report-apr-27-2015-2015-4">Credit Suisse economists explained on Friday</a>. "Also, the ECI is not distorted by shifts in the industry mix, unlike average hourly earnings."In the past, <a href="http://www.businessinsider.com/employment-cost-index-triggers-sell-off-2014-7">traders have attributed spikes in market volatility to big moves in the ECI</a>.In an email blast with the subject line "Hold on to your chair," Deutsche Bank's Torsten Slok warns Thursday's report could once again be a catalyst for volatility as it could have implications for monetary policy, in particular the timing of the Federal Reserve's first interest rate hike."Because of year-over-year base effects we could see a solid uptrend in wages," Slok wrote. "This kind of increase would have to make the Fed feel better about its inflation forecast, and recall that Chair Yellen has said that rising wage and price inflation is not a precondition for liftoff."A big jump in the ECI would increase conviction that the Fed may start hiking rates sooner than later, a shift that many consider to be bearish for the markets in the near-term.The <a href="http://www.businessinsider.com/monday-scouting-report-apr-27-2015-2015-4">consensus is expecting a 0.6% increase in the ECI in Q1 from Q4</a>. On a year-over-year basis, that represents a 2.6% year-over-year jump.But there's not too much confidence in these forecasts."In advance of the release, the BLS earlier this week put out its <a href="http://www.bls.gov/ncs/ect/sp/ecisf5yr.pdf">annual revision of data going back five years</a>, incorporating updated seasonal factors," Slok added. "The revisions still show low figures for the 2014Q1 seasonally adjusted increments in compensation per hour and wages-and-salaries; indeed, the comp number remained at 0.3%, rounded, and the wage number revised only from 0.2% to 0.3%. Given the uncertainty about the underlying tendency at this juncture in a rather erratic series, there's plenty of room for surprises on Thursday morning."Like Slok says, "Hold on to your chair."<div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div> <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/container-ships-collide-suez-canal-egypt-2015-3">Watch these giant container ships collide near the Suez Canal</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="E4MDQ2dDq9xjV9qTP2lvmq2AeTRu-HAW" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

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