Average salary hikes are estimated to be marginally higher in the current year than the previous year. This was the outcome of a survey conducted by KPMG India. The current expectation of average salary hike is predicted to be about 9.6 percent for the financial year 2018 – 19. However, key talents are expected to get much more at 14.7 percent in the same period. This suggested that the average salary hike would continue to be in the single-digits only.
Difference between Projection and Actuals
For the financial year 2017 – 2018, the average estimated salary increment was 9.7 percent. However, the actual average hike was only 9.4 percent. Therefore, there is every possibility that there could be differences between the estimated salary hikes and the actual. KPMG’s People & Change Advisory partner and head, Vishalli Dongri, disclosed that more than 270 organizations data cutting across 18 sectors were analyzed in its annual compensation trends survey, ET reported.
Significantly, the survey report indicated that 19.9 percent of participants expect attractive package offerings as one of the top three levers for attracting talent. Additionally, nearly 75 percent of the enterprises spotted high potential employees. As a result, these organizations could offer them a bigger average increase of 14.7 percent. This could also be interpreted as the better performer getting more recognition than the rest. The report assumed significance as the month April is mostly devoted to appraisal and target fixing.
Though the organization announces the annual increment in April, most of them are also attached to the continuous performance rating. Aside from that, the hike would form part of the variable pay. Dongri commented that “Organisations across sectors have stated that one of their top HR priorities for this year is re-looking at their performance management system framework to create a sharper focus on a pay differentiation for high performers.”
In respect of the variable pay projection, the report suggested that the average variable pay would increase to 15.7 percent in the financial year 2018-19. In the preceding year, it was 15.4 percent. This clearly demonstrated that the organizations would continue to focus on those who are performing continuously. There was a threat that once the hike is announced, an employee would leave the organization for better pay package.
Highest Variable Pay
Significantly, the biggest variable pay based on the cost of the company concept is practiced by none other than financial services sector. The lowest sector in the segment is NGO, which is quite natural since they ran their organizations based on donations and wanted to focus more on the projects.
Aside from the average pay hike, the KPMG report also provides insights in respect of trends in the compensation. This apart, the report offered readers a number of a key reference point on diversified aspects. This included employee attrition rate, benefits, and increments. The report also talked about how the trends were shaping up for the HR for the current year. There was no industry-specific average hike in the report.
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