The Hindu : Business : Salaries rise in 2004, says survey

Online edition of India's National Newspaper
Wednesday, Feb 09, 2005

Business

Business

Salaries rise in 2004, says survey

By Our Staff Reporter

NEW DELHI, FEB. 8. Noting that the pay cheques of salaried Indian employees grew bigger by between 9.7 per cent and 14.3 per cent in 2004, the ninth annual Salary Increase Survey conducted by outsourcing and consulting firm Hewitt Associates has declared that the outlook for increases in 2005 looks even stronger with employers stating that they are more confident about the direction of the economy now and resultantly the expected performance of their organisations.

The survey, which analysed information on more than seven lakh employees, in 573 foreign owners, locally owned and joint venture organisations between July 2004 and January 2005, measured the performance and reward trends across five employee groups in 24 different industries.

The Asia Pacific Business Consulting Leader of Hewitt Associates, Nischae Suri, said employers reported a more positive outlook on salary increases across industries in 2004 due to a large region-wide economic upswing and the global attention attracted by India. And more importantly the official said "projections for 2005 also indicate that this trend will continue."

The survey highlighted some important and interesting aspects of salary increases. It said before the late 1990's, senior and top management received the highest increments, but the trend reversed in 2000 with the professional, supervisor and technical level personnel receiving the highest increases. And in the past five years, this segment has gained the most and in 2004 too it registered a salary increase of 14.3 per cent with the projection for 2005 pegging this increase even higher at 14.8 per cent.

Among the various sectors, it was the information technology industry that witnessed the highest average salary increase in 2004 at 14.9 per cent.

It was followed closely by the entertainment, communications and publication businesses at 14.7 per cent and the IT enabled services at 14.5 per cent.

On the other side of the spectrum, industries with the lowest salary increases in 2004 were not-for-profit at 9.1 per cent, banking at 9.3 per cent and chemicals and petrochemicals at 9.5 per cent.

But it is the projection for 2005 that is an eye-opener. According to the survey, in 2005 the entertainment, communications and publication business is set to grow the most and register a 15.4 per cent increase in salaries, marginally ahead of the present leader IT at 15 per cent and IT enabled services at 14.4 per cent.

The survey also revealed that nearly all the organisations had platforms to measure and manage performance and noted that the use of variable pay as a strategic lever continues to be an important means of attracting and retaining talent as 85 per cent of respondents had a variable pay plan in 2004.

The study also found that an outstanding performer earns more than twice the salary increase when compared with an average performer.

"Organisations have been driven to spend each dollar wisely and so today chief executive officers and business leaders have a stronger commitment towards differentiating rewards basis contribution," said Mr. Suri.

Printer friendly page
Send this article to Friends by E-Mail

Business

News Update

Stories in this Section