Salaries in India are projected to rise by an average of 6.4 per cent in 2021, according to Willis Towers Watson’s latest Salary Budget Planning Survey report. This is marginally higher than the average actual increase of 5.9 per cent in 2020. The report looks at a range of job grades across various industry sectors and is designed to provide companies with guidance for their annual salary forecasting for the year ahead.

A comparison of projected salary increases across key markets in the Asia Pacific this year shows that Indonesia is projected at 6.5 per cent, China at 6.0 per cent, Philippines at 5 per cent, Singapore at 3.5 per cent, and Hong Kong at 3.0 per cent. The 2021 projected salary increases between key markets in Asia Pacific shows India leading at 7.0 per cent followed by Indonesia at 6.5 per cent and China at 6% respectively.

Of the surveyed companies in India, 37 per cent have projected a positive business revenue outlook for the next 12 months, up from 18 per cent in Q3 2020. Despite a comparatively optimistic projected business outlook, recruitment is yet to pick up. The study shows that only 10 per cent of the organisations in India plan to add new headcount compared to 14 per cent last quarter.

On average, 20.6 per cent of the salary increase budget is being allocated to top performers, which represent 10.3 per cent of the employees in India. this implies that for each INR 1 allocated to an average performer, INR 2.35 is allocated to a top performer and INR 1.25 is allocated to an above-average performer.

Commenting on the findings, Rajul Mathur, Consulting Head – Talent & Rewards, Willis Towers Watson India said, “As companies in India respond to the economic implications of the COVID-19 crisis, there is an increased optimism on business recovery, but it is yet to translate into the salary increment budget. With compensation budgets lower than previous years, companies are likely to prioritise allocation towards protecting critical and high skilled talent. Through 2021, we can continue to expect greater emphasis on pay for performance and pay linked to business output.”