Hi-tech (HT) and shared services and outsourcing (SSO) will record the highest salary increases, at 9.5% and 9.1%, respectively.
The study was conducted between May 2022 and November 2022 involving 1,300 companies covering more than 6,000 jobs and over 17 lakh cumulative employee strength
The study indicated that in India, the average pay ratio between a CEO and CXO was around 1:2 to 1:3, depending on the size of the company and the maturity of the industry. (Illustration by Suneesh Kalarickal)
India Inc will revert to pre-pandemic levels of salary hikes with a projected increase of 9-9.5 percent across industries in 2023, according to a report.
In terms of industries, hi-tech (HT) and shared services and outsourcing (SSO) will register the highest salary hikes of 9.5 percent and 9.1 percent, respectively. Consumer and retail, auto, agriculture and chemicals, media and entertainment, and life science are predicted to roll out an average hike of 9 percent, Mercer’s Total Remuneration Survey said.
The study was conducted between May 2022 and November 2022 across 1,300 companies covering more than 6,000 jobs and over 17 lakh cumulative employee strength. “It is a well-known fact that India is still relatively insulated from the global slowdown, hence most industries have maintained the salary increase forecast at 9 percent,” Mansee Singhal, senior principal, rewards consulting leader, India, at Mercer told Moneycontrol.
He highlighted that there are industries like internet/e-commerce and IT services that are projecting increases to the tune of 7-8 percent so the ones which have a direct impact due to revenue dependence on other markets or funds generation have taken a softer approach to hikes.
CEOs are paid thrice that of other CXOs
The study indicated that in India, the average pay ratio between a CEO and CXO was around 1:2 to 1:3, depending on the size of the company and the maturity of the industry. Emerging and midsize organisations with broad-based pyramids have CEO pay as three times that of CXOs at base compensation, while for mature firms, this is less than double.
However, with sizeable stock grants included at the head of the organisation (CEO) level, the total compensation ratio for CEO:CXO is seen as 1:3. CXOs include all direct reports to the CEO such as COO, CHRO, CFO, CTO, etc.
“When organisations are starting as well as the ones which are midsize and have broad pyramids, the difference in responsibility levels are distinct, calling for sharper differences in CEO to CXO pay,” Singhal said.
Over 52% of companies plan to add employees
More than 52 percent of companies are planning to add employees whereas only 1.3 percent are looking towards reducing their workforce. Skills such as artificial intelligence and machine learning, data science and analytics, DevOps and cloud support, software development, cybersecurity, business intelligence, and robotics remain in high demand.
Overall voluntary attrition for 2022 would be similar or higher than in 2021 at around 12 percent. The SSO industry reported the highest attrition of 18 percent. Reasons for the high attrition among employees include dissatisfaction with pay/ability to get a higher salary at another company, dissatisfaction with the company culture and policies, leaving for a different role in the same industry, and lack of desired flexible work arrangements, among others.
The study also said many companies (42 percent) are currently applying skills-based pay in the Asia-Pacific region. However, not all organisations and roles in India can move to this format immediately.
Only 16 percent of companies in the APAC report formally monitored market demand for skills and only 12 percent of companies in the report formally applied a premium or discount to a job for skills.
“As these markets have been relying heavily on function-based premium, skills as a currency is relatively new for them. This is different for India, which has been in skills conversation for a longer period,” Singhal said. link