India Inc plans to reward employees with double-digit increm

NEW DELHI: Salaries across India Inc are expected to rise at a healthy pace this year as a draught of strong economic growth lifts consumer

sentiment and spurs corporate boards into rewarding key people and hire exciting talent. Initial indications are that employees across sectors may get moderate-to-fat increments and salary hikes in the 9-18% range this year around. No more gloomy messages of pay-cuts, layoffs and heightened austerity measures; instead there is a buzz of promising bonuses, although this may not match the 2007-08 euphoria levels.

Key executives in companies belonging to telecom, retail, FMCG, automobiles and consumer durables are already contemplating a healthy hike for employees with industry fortunes turning better and the future looking promising. “If we take a realistic look on expected sa lary hikes this year, it is surely going to be around 9-9.5% across sectors,” said Sandeep Chaudhary, performance and rewards consulting practice leader at Hewitt Associates. “Companies will focus on a more realistic approach towards salaries, as well as hiring,” he added

The hikes, in some cases, are simply a function of industry dynamics. In others, it is a mixture of desperation and hope.

The auto industry grew at a rapid pace last year and was one of the first to benefit from an increase in demand. With competition increasing and a slew of launches being planned, companies are leaving nothing to chance. Market leader Maruti Suzuki is looking at a 10-15% hike, up from last year’s 8-10%. It also plans an average bonus payout of 100% across levels like last year. “It will be an extremely challenging period in terms of retaining and hiring people. We are beefing up our R&D capabilities and need resources in other segments of the business too,” said SY Syddiqui, managing executive officer (administration, HR, finance & IT), Maruti Suzuki India.

The aviation industry was brutally savaged last year. With air travel picking up, companies are hoping to reward disgruntled employees, who put up with a 15-20% average salary cut in 2009. Airlines also have to contend with poaching from rivals, which is a big issue in this sector.

But when it comes to bonuses, there’s nothing to beat what mobile telcos have been offering. Companies like Bharti Airtel, caught in a bitter tariff war, had offered its junior-level employees (with 2-3 years experience) an average of 140-150% bonus last year, while people at the senior level (with 15-20 years experience) received an average bonus of 125%.

There were also some cases of bonuses of 160%. Bharti employees expect to get a 10-15% raise this time, compared with 8% last year. A final call will be taken after a salary survey in April. “We take a call on the quantum of increase based on what our competitors offer. Since we hire from sectors like telecom, banking, FMCG and IT, we benchmark our salaries accordingly,” said Krish Shankar. Mr Shankar has good reason to sound guarded. The entry of several new players is expected to propel salaries to new highs, a nightmarish scenario considering what is happening to their tariffs.
var zz=0;var sldsh=0; var bellyaddiv = ' ';sldsh=1; var stindex=100; var stp=150; var taglen=0; var tmp; var tagcheck = new Array("div","span","br","font","a"); var storycontent = document.getElementById("storydiv").innerHTML; var firstpara = storycontent.substring(0,storycontent.toLowerCase().indexOf("

")).toLowerCase(); function findptt(cnt){ zz++; if(zz == 10)return; var xxx=-1,yyy=-1; var ccnt = cnt; for(ii=0; ii < tagcheck.length; ii++){ xxx = ccnt.indexOf("<"+tagcheck[ii]); if(xxx != -1 && xxx < 150){ stp = stp; var tmp1 = ccnt.substring(ccnt.indexOf("<"+tagcheck[ii]),ccnt.length); yyy = tmp1.indexOf(">"); if(yyy != -1){ taglen += yyy; stp = stp + yyy; yyy+=1; } break; taglen = taglen + tagcheck[ii].length + 3; } } if(xxx == -1 || xxx >= 150){ return; }else{ var tmp2 = ccnt.substring(0,xxx); tmp2 += ccnt.substring((yyy+xxx),ccnt.length); findptt(tmp2); } }findptt(firstpara); if(firstpara.length <= taglen + 150){ stp = firstpara.length; } var tmpminus=0;var tmpcon = storycontent.substring(0,stp);if(tmpcon.lastIndexOf("<") < tmpcon.lastIndexOf(">")){}else{ tmpminus = tmpcon.length - tmpcon.lastIndexOf("<");}stp = stp - tmpminus;tmpcon = storycontent.substring(0,stp);stp = tmpcon.lastIndexOf(' ');tmpcon = storycontent.substring(0,stp) + bellyaddiv + storycontent.substring(stp,storycontent.length); if(sldsh == 0 && doweshowbellyad != 1){}else{ document.getElementById("storydiv").innerHTML = tmpcon; } var hoverlink=''; var wintype1='';var imgid = '5526088';var capt = 'Top tips for netting your dream job
Win office politics
Top 10 Paymasters
Tips to avoid getting fired
Turn downtime into job offers
How to become a good salesman

';var cnt='1'; var ttl='Jobs'; var b1=""; if(cnt > 1){ b1 = '

More Pictures

'; } var b2 = '

'+ capt +'

'; var b3 = '

'+ capt +'

'; if (wintype1!='0') { bellyad.innerHTML = b2 + b1; } else { bellyad.innerHTML = b3 + b1; }

ndia’s IT sector, which contributes nearly 5% to the GDP, is also holding out a similar promise for its employees. Companies such as Cognizant,
Jobs


SAP, VMware, Mahindra Satyam, TCS, Wipro, Infosys, Genpact, Oracle, MindTree and Accenture are likely to offer a hike of 7-15% at the operational level and 12-18% at the senior levels. IT giant Wipro has hiked employee salaries by 8-12%, while at Mahindra Satyam, employees can expect a salary hike of 8-20%. “We hope to have a salary hike in April. We have already given 8% hike in October last year,” Nandita Gurjar, senior vice-president and group head, HR, Infosys, said on Monday.

C Mahalingam, executive vice-president and chief people officer at offshore product firm Symphony Services, said his company would be giving a hike of 7-8% to its employees and 8-9% to its top talent. Another IT giant MphasiS has announced a ‘recompense’ bonus — an innovative compensation model based on the company’s performance and employees’ individual performance — this year.

The FMCG sector, which weathered the recession storm by refraining from layoffs and salary cuts, is expected to see an average salary hike of 12-13%, say industry officials. “FMCG sector companies will maintain its increments this year at 10-12% levels, similar to last year. However, this year, variable pay will continue to be a key focus area for companies for retaining talent,” said NS Rajan, partner and global leader, HR Advisory, Ernst & Young.

But A Sudhakar, Dabur ED-HR, said salary hikes are expected to be higher than last year. “Even last year, the FMCG sector saw decent hikes of up to 11%. However, this year, we are looking at a salary increment of 12-15%,” he said. Consumer durable majors, such as LG, are also planning to hire around 4,000 people this year. LG COO YV Verma said that while the industry saw a good 8-9% growth last year, it is expected to go up to 15% this year. Like many companies in this hyper-competitive sector, the south Korean giant is leaving nothing to chance. It has already announced a 16% hike. Even the badly-hit retail sector is slowly learning to smile. “The maximum that this sector might offer this year is a 5-8% hike in salaries,” said Govind Shrikhande, CEO, Shoppers Stop.

The textile industry, which generates the second-largest number of jobs in India, had cut almost 500,000 jobs during the slowdown. Salaries were not even talked about. Things are different this year, said Nitin Kasliwal, managing director S Kumar’s Nationwide. “Last year, there was hardly an increase in salary. We plan to give a 15-20% hike this year depending upon performance.” RK Dalmia, president, Century Textiles, added: “Most of the textile firms resorted to salary cuts last year. But now companies may offer their usual hike of 10-15%.”

It was a brutal year for aviation last year with average salary cuts of 15-20%. But things may be looking up. SpiceJet CEO Sanjay Agrawal told ET that the airline is currently doing an appraisal of its employees and promises a reward. “We will reward our employees in double-digit figures depending on their experience and other parameters as we made a profit in the last quarter,” he added.