Mumbai: The labour markets in Asia-Pacific including the struggling Indian market are expected to see a salary hike of 10% in 2023.
A report by Global advisory, broking, and solutions company Willis Towers Watson, said that companies in India are budgeting an overall increase of 10% for 2022-2023 when compared with the actual 9.5% growth in the previous year.
58% of the employers in India have budgeted for higher salary increases for the ongoing fiscal year. A quarter of these companies made no change in the budget. Only 5.4% have reduced the budget compared to 2021-2022.
After interviewing 590 organisations in India, analysts found that around 42% of companies in India have projected a positive business revenue outlook for the next 12 months. Only 7.2% have projected a negative outlook.
Information Technology (65.5%), engineering (52.9%), sales (35.4%), technically skilled trades (32.5%), and finance (17.5%) are expected to be the most sought-after functions for recruitment. The financial services, banking and technology, media and gaming sectors are expected to see the highest salary increase at 10.4%, 10.2%, and 10%.
China is expecting to see an increase of 6% while Hong Kong and Singapore are likely to see a 4% increase next year. Voluntary attrition rates in India continue to be amongst the highest in the region at 15.1%. It is only second to Hong Kong, said the report.
WTW Consulting Leader India, Work and Rewards, Rajul Mathur said 2021 saw actual salary increments being higher than budgets due to better-than-expected business performance and the need to retain talent. "Despite the economic headwinds, higher projections for 2023 reflect cautious business optimism and a continued tight labour market."
He added that there have been significant salary increases across sectors in 2022 and a similar trend is expected in 2023. "Companies are allocating more variable pay budgets to above average and top performers," said the report.
Mathur added that organisations are focusing on long-term incentives, innovative career growth opportunities, flexible working, and overall well-being to grapple with the current talent supply challenges.
Analysts relied on a survey across 168 countries in April and May 2022 for the report.