Companies in India likely to give 9.8 pc salary raise in 2024: Willis Tower Watson report

New Delhi: Companies in India are expected to give a salary raise of 9.8 per cent in 2024, slightly lower than the actual salary increase of 10 per cent in 2023, as companies across industries are still closely monitoring their cost structures, says a survey.

According to Willis Tower Watson's latest 'Salary Budget Planning India Report', the median salary increase in India is forecast to rise by 9.8 per cent in 2024, close to the actual salary increase of 10 per cent in 2023.

The survey was conducted in April and May 2023. Approximately 32,512 sets of responses were received from companies across 150 countries worldwide. The survey had 708 participants from India. In Asia Pacific, 7,372 organisations from 22 markets responded. Being an emerging market, salary increases in India continue to be the highest across Asia Pacific (APAC). The 2024 salary increase for Vietnam is projected at 8 per cent, followed by China at 6 per cent, Philippines at 5.7 per cent and Thailand at 5 per cent. "Companies across industries are still closely monitoring their cost structures. Within the IT sector, a noticeable correction is expected with salary increments reducing from approximately 11 to 12 per cent in the past to a projected 10 per cent for 2024," said Rajul Mathur, Consulting Leader, Work and Rewards, WTW India. In contrast, sectors like manufacturing, pharmaceuticals, media, gaming, and global captive centres (GCCs) are expanding and this is evident from their hiring plans and salary allocations for 2024, Mathur said.

The report further noted that tighter labour markets and rising inflation have been cited as some of the major concerns influencing salary increase budget changes for 2024. However, compared to 2022, more than half of the companies have increased their salary hike budgets this year, while a quarter have raised their budgets from earlier projections in December 2022. As per the survey, slightly more than one-third (36 per cent) of the companies have projected a positive business revenue outlook for the next 12 months in Q2 2023 compared to 42 per cent in Q2 2022. In terms of hiring, almost 28 per cent of companies plan to recruit in the next 12 months while about 60 per cent companies have increased headcount in 2023, as compared to the previous year.

The report also identifies 'hot jobs' for recruitment in the next 12 months, namely roles in information technology (61 per cent), engineering (59.8 per cent), sales (42.9 per cent), technical skills trade (38.6 per cent), finance (11.8 per cent), marketing (10.6 per cent) and human resources (3.1 per cent). Voluntary attrition rate in India has gone down from 15.3 per cent in 2022 to 14.6 per cent in 2023 although it is still one of the highest among the APAC markets, the survey said.

As per the sectoral trends, technology, media and gaming, financial services and retail sectors are expected to see the highest salary increase at 10 per cent in 2024. "Companies in the financial services, retail sectors and captive setups have projected marginally higher increases for 2024, as compared to the actual salary increase in 2023 due to the continued talent demand," the survey said