Aon survey projects average pay hike of 7.7% in 2021

India Inc is likely to give out an average salary hike of 7.7% in 2021, according to 25th annual salary survey in India by Aon released on Tuesday.
According to the survey, more than 1,000 companies out of 1,200 companies surveyed in India are likely to hand out salary hikes this year even as companies recover from the pandemic shock. Despite a tough 2020 with stringent lockdowns, India continues to project the highest salary increases among the BRIC nations.

In 2019, companies in India had given an average pay increase of 9.3%, according to Aon.

The survey finds that while salary increments indicate strong recovery, the Code of Wages could be a gamechanger.

The study analyses data across 1,200 companies from more than 20 industries.

“We expect the increment dynamics for 2021 to play out over a longer period of time given the uncertainty and potential impact of forthcoming changes,” Nitin Sethi, partner and CEO of Aon’s performance and rewards business in India.

“We expect organisations to review their compensation budgets in the second half of the year once the exact financial impact of the Labour Codes is known,” he said.

The highest-paying sectors in 2021 continue to be the ones from last year – information technology, information technology-enabled services, life sciences, e-commerce, and fast-moving consumer goods.

“It is notable that the sectors that were adversely impacted by COVID-19, such as retail, hospitality and real estate, are projecting healthy increases in the range of 5-6%,” said Roopank Chaudhary, partner in Aon’s human capital business in India.

“Such numbers reflect their intent to stay relevant and to control attrition, which had increased for these industries last year.”