The latest survey conducted by global professional services firm AON suggested that individual development and good work-life balance are considered as the top reasons for Indian staffs to continue working with in an organisation. These findings indicated how today’s Indian workforce pay more attention in the richness of work experience than ever before.
Meanwhile, the ratio between salary increases and GDP growth rates have always been around the range of 1.2X -1.4X for major global economies in the world. The ratio for Indian economy is increasingly merging with the global line, indicating a sign of the reducing froth in this segment.
With the compensation budgets keep shrinking owing to economic uncertainty over the last few years, companies are increasingly taking into account the base effect such as pay increases for the top and senior management, which is consistently going down. At this level, pay increases for employees would be driven more by bonuses and incentives.
This condition helps economise cost and budget at an aggregate level used for rewarding junior management and top performers or key talent in the organisation. Considering business performance expectations and the trend in attrition, the AON research projected that pay average hikes in India will remain between 9.4 and 9.6 percent, Zeebiz reports.
While there will be a complex interplay between pay increases and cost of living growth in 2018, companies are voting for financial prudence. The report also noted that HR practices’ confidence and maturity underwrite pay increases.
Companies are reportedly to drive pay differentiation consistently, even if it means that they have to put average performers aside. The survey added that while differentiation is key, performance-linked incentives does not appear to be the tool for it and the last decade shows that knee-jerk reactions in HR are already a thing of the past.