According to a survey, India Inc. is likely to see an average Pay Rise of 9.8 percent in 2023, slightly higher than the 9.4 percent increase in 2022, and for top talent, the increase will be much higher.
Organizations are focusing on retaining critical talent through various talent management initiatives and formal retention and compensation plans, according to Korn Ferry’s latest India Compensation Survey.
According to the survey, which included 818 organizations with over 800,000 employees, salaries in India are expected to rise by 9.8 percent in 2023.
While the increase was significantly lower in the pandemic-hit 2020, at 6.8 percent, the current growth trend reflects leaders’ and employees’ resilience and ability to reimagine and rebuild for a sustainable future.
In line with India’s focus on accelerated digital capability building, the survey forecasts significant increases in the life sciences and healthcare, and high technology sectors of 10.2% and 10.4%, respectively.
“Although recession and economic slowdown are being discussed globally, there is optimism about the Indian economy with a projected GDP growth of 6% upwards,” said Navnit Singh, Chairman, and Regional Managing Director, of Korn Ferry.
Singh went on to say that for top talent, the salary increase could be anywhere from 15% to 30%.
Other sectors with projected salary increases include services (9.8 percent), automotive (9.6 percent), chemicals (9.6 percent), consumer goods (9.8 percent), and retail (9.8 percent) (9 percent).
While the macroeconomic outlook is positive, businesses are facing new and increasing pressures, such as changing customer preferences, digital transformation, increased collaboration, and so on.
Most businesses will need to transform their workforce to meet these demands to stay competitive. Furthermore, 60% of the organizations polled indicated that they have implemented a hybrid model.
Meanwhile, in India, employees in Tier 1 cities continue to be paid more than those in Tier 2 and Tier 3 cities.
However, as the hybrid model and remote work become more common, “we are seeing a shift towards work becoming location agnostic, assisting Tier 2 cities such as Ahmedabad and Pune in competing with Tier 1 cities in Fixed Annual Cash Received by Employees,” according to the report.
