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Companies in India are expected to give a salary raise of 9.8% in 2024, slightly lower than the actual salary increase of 10% 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% in 2024, close to the actual salary increase of 10% 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%, followed by China at 6%, Philippines at 5.7% and Thailand at 5%.

“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% in the past to a projected 10% 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, Mr. 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%) of the companies have projected a positive business revenue outlook for the next 12 months in Q2 2023 compared to 42% in Q2 2022.

In terms of hiring, almost 28% of companies plan to recruit in the next 12 months while about 60% 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%), engineering (59.8%), sales (42.9%), technical skills trade (38.6%), finance (11.8%), marketing (10.6%) and human resources (3.1%).

Voluntary attrition rate in India has gone down from 15.3% in 2022 to 14.6% 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% 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.