Salary hikes in India highest compared to US, UK, Germany in 2022: Survey

Salaries in India are expected to go up by 10.4% in 2023, compared to an actual increase of 10.6% to date in 2022, and e-commerce is the leading sector with the highest projected increase, according to a survey.

According to leading global professional services firm Aon Plc’s latest Salary Increase Survey in India, the expected hike in remunerations in the country is slightly higher than the 9.9% increase projected in February.

When it comes to average salary increase in percentage terms for 2022, India ranks top in comparison with countries like the US, UK, Germany, China, and others, the report said.

Also read: Senior executives may get 8.9% salary hike in 2022, highest in 5 years: Survey

The average salary increment for 2022 in countries like Germany (3.5%), UK (4%), USA (4.5%), China (6%), Brazil (5.6%), Singapore (4%), and Japan (3%) are much lower than India’s (10.6%).

The study that analysed data across 1,300 companies from more than 40 industries in India noted that the attrition rate for the first half of 2022 continued to be high at 20.3%, marginally lower than the 21% recorded in 2021, thus retaining the pressure on salaries.

This trend is expected to continue for the next few months, the survey noted.

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“Despite the global recessionary headwinds and volatile domestic inflation, salary increases projected in India for 2023 are in the double digits,” Roopank Chaudhary, partner, Human Capital Solutions at Aon in India, said.

This increase is a reflection of the confidence that corporate India has in its strong business performance.

“Business leaders, however, must make decisions that ensure their workforce remains resilient today as well as into the future. They need to review their total rewards strategies and balance the impact of rising costs and salary pressures with a relatively high rate of attrition and the ongoing demand for critical talent,” Chaudhary added.

The survey also found that four out of the five sectors that are expected to have the highest projected salary increase are technology related and experience the highest volatility and impact of current global economic uncertainty.

“With an expected salary increase of 12.8%, e-commerce leads sectors with the highest projected increase, followed by start-ups at 12.7%, hi-tech/ information technology and information technology-enabled services at 11.3 per cent, and financial institutions at 10.7%,” Chaudhary said.

Also read: TCS attrition rate rises to 19.7%; headcount crosses 600,000

According to Jang Bahadur Singh, director, Human Capital Solutions at Aon in India, volatility is a key determinant of salary increases by industries the top salary increases are in the most volatile industries.

“As the broader economic circumstances impact the talent landscape, businesses must create holistic rewards strategies unique to their situation and sector to retain and attract the talent they need. “Data-driven insights give employers the clarity and confidence needed to make better decisions and build a resilient workforce across sectors,” Singh noted.