More companies to give salary hikes in 2021 as India Inc bets big on recovery

More companies are likely to start rolling out salary hikes for employees in 2021 as Indian corporates are hopeful of a speedy economic recovery after the economic devastation in the current fiscal year due to the pandemic.

An Aon salary survey has revealed that 87 per cent of the companies who took part in the survey are likely to reward employees with salary hikes next year. In comparison, only 71 per cent of companies have given a hike in 2020.

There are many companies which are planning to give increments to employees next year. However, the hikes may not be as big as over 60 per cent of companies said they will offer salary hikes between five to 10 per cent.

However, it is still an improvement considering only 45 per cent of companies handed out hikes in a similar range in 2020.

It may be noted that Aon’s latest Salary Trends Survey in India covered 1,050 companies across more than 20 industries. Commenting on the survey, Nitin Sethi, a partner at Aon and the CEO of the firm’s Performance and Rewards Solutions practice in India, said praised business leaders for putting their investments in their employees and clients.

“Business and HR leaders made hard decisions in Q2 and Q3 of 2020 and are now betting on the green shoots of improving consumer demand,” he said.

The Aon salary trends survey indicated that Hi-Tech, IT, Information Technology Enabled Services, life sciences, e-commerce, professional services and chemicals are some of the sectors that will see bigger hikes.

There is good news for the sectors that have gone through a difficult period in 2020. Companies involved in hospitality, retail, real estate and infrastructure are likely to get a higher percentage of hike in 2021 after a damp 2020. However, these sectors still trail most other sectors.

Navneet Rattan, who is a director at Aon in India’s Performance and Rewards Solutions practice, said the pandemic has impacted different sectors and organisations. “We see high differentials in salary increases both intra and inter-industry,” said Rattan. What he means that the highest and lower increase could see a higher gap in 2021 due to varied performances across different sectors.