The average salary increment across all sectors in India is projected at 10.3% in FY 2014, which is 0.3% points lower than the previous FY 2013 (10.6%). The average variable pay across sectors is projected to grow at 1.2% to 18.5% in FY 2014, against 17.3% in FY 2013.
“The increment levels this year are almost at the same levels like last year," says P Thiruvengadam, Senior Director, Deloitte in India. "The main reasons are lack of economic growth, and no significant movement of people. Also, inflation is not yet fully under control and there are other economic uncertainties.”
The highest increment is expected in the pharma sector at 12.4% and the lowest projection is observed in the retail sector at 9.1%. The highest projected variable pay is in the BFSI sector at 20.2%, while the lowest is projected in the logistics sector at 16.9%. The highest attrition is projected in the ITeS sector at 16.4% and the lowest is in the logistics sector at 10.5%.
The report goes on to highlight that the average increment at clerical cadre and junior management level is expected to be lower than the overall average increment at 10.3%. The retail sector is projected to have the lowest average increment at the clerical cadre at 8.6%.
Meanwhile, the average increment at the top management level is significantly higher than the overall average increment; the average increment at the top management level in the ITeS and pharmaceutical sector is significantly higher than other sectors.
Attrition rates have reduced marginally across sectors. However, it continues to be a concern in the BFSI, hi-tech, ITeS and media and advertising sectors. Highest attrition rate had been recorded in the clerical cadre in the ITeS sector at 26.2%.
The logistics sector has reported the lowest overall attrition at 10.5%. The consumer business sector has seen the least attrition among the top management level at 8.2%.
Organisations across sectors attribute better career prospects, better pay opportunities and personal reasons as the top three reasons for attrition. While career management, developing potential leaders, and retaining and rewarding critical talent are the top three HR challenges faced by organisations.