Mumbai: Employees in India are likely to get a salary increase of 11.9 per cent this year, says a survey conducted by global human resources consulting and outsourcing firm Aon Hewitt. This is well ahead of competitors China and Philippines, the highest in the Asia-Pacific region.
Sandeep Chaudhary, practice leader - compensation consulting told CNBC-TV18 that pharmaceutica sector is expected to top the charts in terms of salary hikes.
"Pharmaceutical has always been topping the charts for the last three years. It has got a very positive outlook. India seems to be a reasonably mature generics market, which is well balanced between local and multinationals," he added.
On the other hand, sectors like telecom and financial services are expected to shell out the least salary hikes this year.
Below is the edited transcript of the interview:
Q: For the second year in a row, India is the leader in the Asia-Pacific region with an 11.9 per cent salary increase and pharmaceuticals the top sector to watch out for?
A: When we were getting and clearing all the results out of one of the most exhaustive studies in the areas of performance and rewards, we were kind of a little surprised looking at a very positive sentiment that corporate India came back with, with a projection of 11.9 per cent salary increase. Outside of a rough and a patchy 2011 that we already had, which has been a combination of poor economics and poor politics, this is certainly a far more positive outlook that corporate India has had on managing talent and managing HR for the long term.
Pharmaceuticals has always been topping the charts for the last three years. It has got a very positive outlook. India seems to be a reasonably mature generics market, which is well balanced between local and multinationals. Clearly is more domestic in the way the investment and consumption really gets regulated for this sector.
Q: The information and the IT outsourcing sectors are connected with what's happening globally. There has been a lot of cautious optimism on the part of the IT sector majors saying that till the uncertainty in the west continues. We are uncertain about which way IT budgets are going to play out. What client's are going to be saying, but in terms of salaries 11.9 and 11.8 per cent for IT as well as ITeS?
A: The Indian Information and Technology sector has a greater dependence on the United States rather than entire of the west. Right now when we are talking about the west, the most patchy point of the west is what is happening in the Europe. If you look at one of the better performing sectors even in the US is the Silicon Valley.
In that sense, majority of American organizations haven't looked at any bit of cut backs on technology spending. Further, you would also look at IT services and application software going a little bit more soft than possibly semiconductor and the product development organizations. Combined put together many of the IT services organizations have also looked at a reasonably positive hiring outlook for the year 2012.
Outsourcing ends up becoming a bit of a double whammy because there is a lot of captive and a third party operation that essentially India has. If you look at the captive banking sectors and the setups in India that ends up becoming a little bit more conservative as compared to the third parties.
Q: No prizes for guessing which are the sectors that will give out the least in terms of the salary hikes this year - telecom and financial services?
A: With what has been happening with the capital markets globally, financial services ends up becoming most adversely hit. Had we included investment banking sector which has abstained from participating in this years study, the number from 10 per cent would have possible got further depressed into something like 7.5 per cent to 8 per cent.
In the telecom sector, with whatever has been happening right from the regulatory to their own constraints around margin compression and ARPUs coming down, even though they are looking at a top-line growth it ends up going a little bit more conservative. But I still think with some kind of surplus cash that they have generated with restructuring exercise, that many of the major telecom organizations have undertaken over the last one year, they are looking at yet a positive outlook.
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