Leading HR solutions firm Aon has projected an average salary increment of 9.5% across industries in India for 2024 in its annual compensation survey – marginally lower than last year’s actual 9.7% hike. Manufacturing, financial services and global in-house tech centres may see 10%+ raises. But IT services could lag at 8.2% amid cost pressures.
Manufacturing Leads with 10.1% Projected Hikes
The Aon survey on salary trends estimates manufacturing sector in India to offer the highest salary hikes this year at 10.1%, underlining continued investments in the space amid policy catalytic measures like PLI schemes. Infra demand is also spurring related sectors.
Within services, financial institutions are projected to give nearly 10% increments, aided by strong credit appetite and retail loan growth. New-age technology firms are not far behind at 9.8%, leveraging high-value digital skills.
IT Services Salary Hikes Trail at 8.2%
However, legacy Indian IT services companies are expected to play cautious at 8.2% average hikes – lagging product companies, startups and most others. This indicates margin pressures weighing amid volatile global macros forcing trimming of discretionary IT projects.
Widespread hiring over last few years also means benched staff percentages have climbed, necessitating tighter talent cost optimization. But niche digital skills still command premiums as cloud transformation continues.
Focus on Engagement, Retention Improving
The report notes that with attrition cooling off from the highs of 2021-22 to reach 18.7%, corporates seem focused on engagement, upskilling programs to retain talent rather than market-matching raises alone. Flexible work models are also getting encouraged.
Nonetheless, sectors like manufacturing and financial services project robust mid-term outlooks, requiring cultivated investments in human capital. The discretionary spend environment augurs positive despite near term uncertainty.
Salary Hikes Still Healthy vs Regional Peers
Despite the projected moderation, India still fares better than rest of Asia at 6.0% average hikes. And remains aligned with major economies like China while outpacing UK, EU.
With localization and cost management compulsions for global CAPEX cycles, India’s consumption story stays largely positive. Hence salary increments continue tracking in high single digits, cementing its competitiveness edge.
