The average salary hikes in 2022 are likely to touch pre-Covid levels, according to a survey conducted by global professional services provider Aon Plc.
In its 26th annual salary increase survey, Aon said average hikes could be in the range of 9.4 per cent. It made the projection after surveying 1,350 companies across 39 sectors. The average hike given by these companies in 2021 was 8.8 per cent and the figure was 9.3 per cent in 2019.
However, the swift recovery coupled with aggressive vaccination and pent-up demand is likely to help these companies bounce back and give pre-pandemic pay hikes to their employees.
Nitin Sethi, partner and CEO of Aon’s performance and rewards businesses in India, said, “While 2021 is a year where certain sectors remain under stress due to the Covid-19 pandemic, most businesses have an optimistic view going into 2022 and are projecting higher salary increases.”
SECTORS WITH HIGHEST & LOWEST SALARY HIKES
Employees working in three sectors are projected to get the highest average salary hikes in 2022. They are technology (11.2 per cent), e-commerce (10.6 per cent) and IT-enabled services (9.6 per cent). In these sectors, the average salary hike is likely to be over the overall rate of 9.4 per cent.
On the other hand, people employed in sectors such as hospitality, engineering services and energy are projected to get the lowest salary hikes in 2022.
Roopank Chaudhury, partner in Aon’s human capital business, said 43 per cent of companies are ready to offer 8-10 per cent salary hike in 2022, compared to nearly 37 per cent companies in 2021. Chaudhury added that 24.7 per cent companies are looking forward to offering a 10 per cent hike to employees, compared to 20.4 per cent in 2021.
Even the companies that plan to give no hikes or 0-5 per cent hikes is projected to fall to 1.1 per cert and 4.5 per cent in 2022 from 2.5 per cent and 7.3 per cent in 2021.
“While pandemic risk in India continues, the business sentiment and salary projections for 2022 tell us that employers are building for growth and are much better prepared than in 2020,” said Chaudhary.
“Employees with digital and technological skills are the most successful in 2021, as we see the highest salary increase for employees with these skills across sectors. We expect that this trend will intensify over time,” he added.
Meanwhile, the survey also indicated that there has been a sharp increase in attrition rate across sectors.
“High double-digit attrition is the strongest we have seen in more than a decade. The war for talent is back in India, which we anticipate will keep salary increases high,” Nitin Sethi said.