BANKING, IT TO SEE MUTED SALARY HIKE OF 8-12%

Writankar Mukherjee, Kolkata
The Economic Times (Delhi edition)

At a time when inflation and rising oil prices are pinching hard, there’s some more bad news. The blue-eyed sectors like banking and financial services, IT, BPO, real estate and auto, which usually steal the show in terms of highest salary hikes, are going to significantly cut down on increments this year. HR circles contend professionals in these sectors are likely to see an average salary hike of around 8-12% this year as compared to 15-20% last couple of years.

Here’s the silver lining. Employees in manufacturing, oil and gas, pharma, telecom and FMCG sectors are relatively insulated. HR circles feel these sectors might even outstrip the others in absolute salary growth. Incidentally, India Inc is currently finalising the appraisal process, which takes place between July-September.

“IT/ITeS are affected due to recession in US and loss in cost-arbitrage. However, employees in the high-end BPO industry may be spared. Sectors, which are directly linked to consumer spending and disposable income like auto will suffer,” KPMG India partner and head (human capital practice) Ganesh Shermon said.

“HR heads in several affected sectors have started informal meetings and formed compensation clubs to take stock of the situation, arrive at par increment rates in their industry and look at ways to tackle employee outbursts,” HR firm Ma Foi Management Consultants CEO E Balaji said.

Patni Computer Systems VP and head (global HR) Rajesh Padmanabhan said salary hikes in IT/ITeS industry would be around 9-12%. “The industry growth rate has fallen and everyone is in a cautious mood. As a result, salary increments will be at its low as compared to an average of 15% for the last two to three years,” he said.

While those in the insurance industry will be relatively insulated due to entry of multiple players and talent shortage, increments in banking and financial services will see a slowdown. “Salary hike may fall to as low as 10% in the non-banking finance companies. Inflation and hike in interest rates has hit badly,” Bharti AXA Life’s director (HR) Priya Ranjan said. Hike in the BFSI usually ranges between 14-17%.

“Salaries in the oil and gas sector will grow by 17% compared to 14% last year. The sector is growing at a tremendous pace, a sign of which is the escalating oil prices,” Cairn India’s HR head Shalini Sarin said. Bharti Airtel’s director (HR) Krish Shankar said the telecom industry would go for the usual level of 15-22% hike.