Salaries are projected to see a median salary increase of 9.3% in 2022 (translating to an average salary increase of 8.8%) as compared to the actual median salary increase of 8% (average salary increase of 7.4%) in 2021, according to the Salary Budget Planning Report by Willis Towers Watson.

Pointing towards a much-anticipated economic recovery, a majority (52.2%) of companies in India have projected a positive business revenue outlook for the next 12 months, up from 37% in Q4-2020. This translates in increased hiring across businesses with 30% of companies planning to hire in the next 12 months. This is almost three times more than last year. 

The survey also shows that a large part of hiring across sectors is likely to happen within critical functions such as engineering (57.5%), information technology (53.4%), technically skilled trades (34.2%), sales (37%) and finance (11.6%), and these jobs will command a high salary.

In addition, attrition rates in India, both voluntary and involuntary have been lower as compared to other countries in the region. The voluntary attrition rate was 8.9% and involuntary attrition rate was 3.3%.

Rajul Mathur, Consulting Leader India, Talent and Rewards, Willis Towers Watson said, "Increased business optimism is clearly translating into higher salary budgets and increased hiring activity. The pandemic was a watershed moment in the way organisations plan their people spend. While talent attraction and retention remain a challenge, the core employee value proposition will now need to go beyond just competitive salaries, and increasingly focus on a wider range of benefits, wellness, upskilling and the overall employee experience. This trend is likely to reshape the people spend and total rewards philosophy in India going forward".

The high-tech sector in expected to see the highest salary increase at 9.9% in 2022, followed by the consumer products and retail sector at 9.5%, and manufacturing at 9.30%. In terms of proportionate increase over last year, the high-tech sector again tops with a projection of almost 1.9% increase from 2021.

"Covid-19 accelerated the digitalisation process across industries including automation and artificial intelligence. These developments, along with the high-tech sector's early adoption of the remote working model has positively impacted the sector's salary projections. The manufacturing and retail sectors saw rising demand driven by the easing of COVID-19 restrictions and a positive outlook of order inflows and consumer sentiment," Mathur added.

On the other hand, the energy sector received amongst the lowest actual salary increase in 2021 at 7.7%. The projected salary of the energy sector in 2022 is also the lowest at 7.9%. Mathur explained, "A combination of the prevailing macro-economic environment, typical business cycle and the lingering business impact from the pandemic have adversely affected the energy sector the most. That said, the salary increments for the renewable sector can be expected to be comparatively higher as India moves towards clean energy."