The slowdown in the Indian economy has started to reflect in the pay increase of India Inc. According to a survey conducted by Aon Plc., companies are expected to increase average salaries of their employees by 9.1% in 2020, down from 9.3% in 2019 and 9.5% the previous year.
The findings of the survey reflect a deep slowdown in the third-largest economy of the continent, where increasing pessimism about job prospects have forced many to decrease their consumption—the primary driver to growth.
The study analysed from over 1,000 companies from more than 20 industries. These participating firms were split equally between manufacturing and service sectors.
As per the report, double-digit salary hikes have not vanished entirely as two out of five companies in the survey were still willing to give a double-digit hike in 2020.
“Despite the economy softening and certain amount of caution coming in, an overwhelming majority of firms still say they are likely to do as well, if not better, in 2020 compared to 2019,” said Tzeitel Fernandes, partner and head of rewards solutions, India, Aon.
She further added that low GDP projection and weak consumer sentiment are the reasons behind our lowest ever prediction.
According to Aon e-commerce and start-ups are probably the biggest winners as their employees are likely to get biggest salary hikes, which is projected above-average 10%. On the other hand, financial institutions will provide an increment of 8.5%.
On the other hand, troubled auto sector witnessed biggest fall to 8.3% to 10.1%.
(With input from agencies)