Talent crunch forces India Inc to offer 15% salary hikes

PAYBACK
Top performers in terms of salary increases
(Figures in %)

Sectors 2007 2008

Real estate & infrastructure 28-29 25.0
Telecommunications 17.2 17.6
Oil & gas exploration, energy 19.0 17.5
Hospitality, restaurants 15.4 17.1
Banking & fin services 12.9 16.9
Manufacturing 14.2 14.4
IT-enabled services 11-12 14.0


Despite the slowdown and turmoil in financial markets, private sector employees have received or can look forward to an average salary increase of 15 per cent this year, roughly the same as the year before but lower in real terms because of the inflation rate, which is ruling at 8 per cent.

Still, this is better than most markets – 5.5 per cent in the US and 8 per cent in China, for instance – mainly thanks to the talent crunch and rapid growth in many sectors.

"Given the slowdown, companies are being cautious. Average increases will be 7 to15 per cent though top performers will still get 25 to 30 per cent, '' said K. Sudarshan, managing partner (India) for executive search firm EMA Partners International.

HR firm Hewitt Associates, however, estimates average salaries in India rose 15.2 across sectors for 2008-09 in line with the increases last year (15.1 per cent) and better than the year before (14.4 per cent) despite slowdown in many sectors.