Brace up for a bad increment season. The annual Salary Increase Survey by human resource firm Hewitt Associates, India Inc will see salaries rising by only 8.2 per cent – the lowest in six years.
It could be worse. Hewitt warns that another 2 percentage pints could be snipped off the raise. Those who get this should consider themselves lucky – sort of. For, at the top management levels, there could actually be a salary contraction by as much as 40 per cent.
In most cases the raise will not even cover the inflation rate if the consumer price index were to be taken as the yardstick. (On this basis, inflation was 10.8 per cent in January.) In other words, your ‘real’ income in 2009 could be less than last year.
Some sectors that handed out the best raises last year will be the stingiest. Among them are retail (expected to give only 5.3 per cent raise), infotech (5.7 per cent), banking & financial services (6.3 per cent), oil & gas (7.3 per cent) and entertainment & publishing (7.5 per cent). The last three were expected in the 2008 Hewitt report to be the most generous, handing out raises of 17.5 per cent, 16.2 per cent and 16.9 per cent, respectively.
Ravi Dhariwal, CEO, Bennett Coleman, declined to comment to Financial Chronicle on why media was seen as tightfisted this year. A K Balyan, human resources director of ONGC only said, “I don’t know how they (Hewitt) have arrived on these figures.”
Ganesh Natarajan, Nasscom chairman, said, “The raises in IT will be in the range of 7 to 8 per cent, which is as high as any other service sector.”
Among the sectors Hewitt expects to be most generous this year are pharmaceutical (giving an average raise of 13 per cent), telecom (11.3 per cent), fast moving consumer goods and durables (11 per cent), chemicals (10.9 per cent) and hospitals (10.8 per cent).
Many in these industries disagreed with the findings of the report. Amar Lulla, Cipla joint managing director, said, “I don’t think salary hikes will be so much. At the most they will be around 5 to 7 per cent (in pharmaceutical sector).”
Harpal Singh, Fortis Healthcare chairman, thought salaries in healthcare would grow by between 7 and 11 per cent. Dabur and Britannia did not respond to our queries.
Surprisingly, Hewitt does not have data on the real estate sector, which, it said last year, would see a 25 per cent salary hike. The reality was far from this. Pradeep Jain, chairman of Parshvnath Developers, is on record that salaries at the senior management level in real estate companies had, in fact, gone down by between 15 and 20 per cent.
The report indicates that 16 per cent of 480 companies surveyed have frozen salaries and 12.6 per cent are considering retrenchment, according to Sandeep Chaudhury of Hewitt.
The report also says that salaries at the top levels are the most vulnerable. The management may have to take actually take a cut of 40 per cent, and senior and middle management will their pay shrink by 39 per cent.
Author - Ronojoy Banerjee,Jayashree Maji also contributed to this article.
Source : mydigitalfc.com