Companies in India are expected to give an average wage increase of 7.3 per cent to employees this year.
Companies in India are expected to give an average wage increase of 7.3 per cent to employees this year. According to a survey, the reason for this is faster economic recovery than expected and revival in business. This is a 2021 Workforce and Increment Trends survey conducted by Deloitte Touche Tohmatsu India LLP (DTTILLP). It also states that the average wage increase will be higher than the 4.4 percent in 2020 this year, but will be less than 8.6 percent in 2019.
92% companies said plan to increase salary
Nearly 92 percent of the companies participating in the survey plan to increase wages. In the last year it was only 60 per cent. The survey was launched in December 2020. It consisted of 400 institutions of seven sectors and 25 sub-sectors. Average wage growth for companies in India is expected to increase from 4.4 per cent to 7.3 per cent. This 7.3 percent projected increase is lower than the 8.6 average wage increase of 2019.
It said that the increase in the budget of salary increase is in accordance with the early signs of faster economic recovery than expected, revival in business and customer confidence and improving corporate profits. According to the survey, 20 per cent of the companies plan to increase the salary in two numbers this year, which was only 12 per cent in 2020. Of the 60 per cent of the companies that made increments in 2020, one third had off-cycle.
Among companies that did not increase salary in 2020, there is a plan to give more increments or bonuses to compensate for the backward year of around 30 per cent. The survey further states that the highest increment in life sciences and information technology (IT) sectors is expected. Whereas, the manufacturing and service sectors are expected to have lower salary increases as compared. It states that only digital and e-commerce companies are expected to increase double-digit average wages in 2021. The lowest growth is expected to be in hospitality, real estate, infrastructure and renewable energy companies.