Amid Covid, India Inc employees got lowest pay hike since 2009: Survey

Amid coronavirus pandemic and the consequent lockdown, companies in India doled out an average salary increase of 6.1% this year, the lowest in more than a decade, says a survey.

But the outlook looks a tad better for the employees in 2021 with a salary hike of 7.3%, says the Aon's Salary Trends Survey 2020-21 released by leading global professional services firm Aon Plc on Wednesday, which was reported by news agency PTI.

The survey showed organisations in the country have shown tremendous resilience despite the Covid-19 challenges and are betting on recovery. As many as 87% companies plan to give salary increases in 2021 compared to 71% in 2020.

According to the survey, companies in India gave an average pay increase of 6.1% during 2020, the lowest since 2009 when the average was 6.3%.

Among the organisations that are considering giving increments in 2021, 61% of these plan to offer increases between 5% and 10% (projected) compared to only 45 handing out hikes in 2020 in the same range.

As per the findings based on an analysis of data across 1,050 companies from more than 20 industries, as of September-October 2020, 87% of surveyed companies said they intend to pay out salary increases in 2021 and 61% of these organisations plan to offer increases between 5% and 10%.

In 2020, 71% of companies provided salary increases and of this group, only 45% gave hikes in the range of 5 to 10%.

"This is a special year -- business leaders are putting investments in their employees and clients ahead of shareholder return. Despite the gravity of the COVID-19 pandemic in India and its deep impact on the economy, organisations in India have shown tremendous resilience and a mature view on talent," said Nitin Sethi, a partner at Aon and CEO of the firm's Performance and Rewards Solutions practice in India.

The survey also said that two-third of the companies either aim to provide similar or higher increments in 2021 compared to the increments offered in 2020.

Further, Sethi said "business and HR leaders made hard decisions in second and third quarters of 2020 and are now betting on the green shoots of improving consumer demand. They see the need to invest in talent as a critical part of their recovery and growth prospects".

The industries looking to provide the highest salary increases are High Technology (Hi Tech), Information Technology (IT), IT Enabled Services (ITeS), Life Sciences, E-commerce, Chemicals and Professional Services.

Meanwhile, companies in the Hospitality, Retail and Real Estate/ Infrastructure industries, which had given very low increases in 2020, are projecting a higher increase for 2021, but still trail most other sectors.

"The impact of COVID-19 has been varied on different sectors and organisations. We see high differentials in salary increases -- both intra and inter-industry.

"The difference between industries with highest increase to lowest increase hits 7.2% points as compared to mere 2.4% points in 2019," said Navneet Rattan, Director at Aon in India's Performance and Rewards Solutions practice.

With inputs from PTI