Wednesday, March 21, 2007

India leads salary hike in Asia-Pacific: survey

India has demonstrated a double-digit growth in salary hike for the fourth year running, the highest in the Asia-Pacific region, with global HR consulting firm Hewitt Associates forecasting an average 14.5 per cent wage hike in 2007.

"Salaries in India continue to rise and will most likely reach the same levels as more developed economies in Asia in the future," Sharad Vishvanath of Hewitt Associates said in New delhi recently while presenting the Hewitt Salary Increase Survey.

Globalisation and increased competition for talent pool are forcing companies to dish out more in terms of incentives and compensation to attract high quality professionals and retain them, Vishvanath said.

Interestingly, locally owned organisations are awarding higher salary hikes than multinational companies in India.

"In 2006, domestic companies saw an overall salary increase of 14.9 per cent compared to the 14.3 per cent hike given by foreign-owned organisations," he said.

Homegrown organisations have aligned compensation practices to that of global standards to strengthen their reward management practices and focus on pay for performance to attract and retain talent and enhance overall productivity, he added.

Hewitt Associates' Sandeep Chaudhary said Indian companies are retaining key employees with equity-based compensation and creating employee ownership.

However, he said India is way behind its western counterparts in terms of adequate leverage of equity- related incentives.

According to the survey, traditional sectors like healthcare and engineering are likely to witness the lowest salary hikes of 12.7 per cent and 15.3 per cent, respectively. On the other hand, banking and financial services and telecommunications companies would continue to increase salaries of their employees, with pay packets in these sectors poised to see a hike of 16.5 per cent and 15.7 per cent respectively.

India is forecasted to be at the top in the Asia-Pacific region with salary hikes averaging 14.5 per cent in 2007 as compared to 14.4 per cent last year, followed by The Philippines at 8.9 per cent and China with 8.2 per cent.

Salary hikes in Japan would be the lowest at 2.7 per cent for 2007 as compared to 2.6 per cent last year.

The study also highlights that use of variable pay as a strategic lever continues to be an important mean of attracting and retaining talent, with 87 per cent of respondents saying they have variable pay plans in 2006.

Hewitt surveyed employees of close to 600 foreign and locally-owned and joint venture companies in various job levels like senior management, middle management, professional/supervisor/technical, clerical and manual workers. PTI