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Companies step on the cash as economy rocks again (View Comments)
Shreya Biswas & Mahima Puri
Posted On Tuesday, February 02, 2010 at 06:13:10 PM
From FMCG To Telecom, India Inc Plans To Reward Employees With Double-Digit Increments
Salaries across India Inc are expected to rise at a healthy pace this year, as a draught of strong economic growth lifts consumer sentiment and spurs corporate boards into rewarding key people and hire exciting talent. Initial indications are that employees across sectors may get moderate-to-fat increments and salary hikes in the 9-18% range this year. No more gloomy messages of paycuts, layoffs and heightened austerity measures. Instead, there is a buzz of promising bonuses, although these may not match the 2007-08 euphoria levels.
Key executives in companies from telecom, retail, FMCG, automobiles and consumer durables are already contemplating a healthy hike for employees with industry fortunes turning better and the future looking promising. “If we take a realistic look at expected salary hikes this year, it is surely going to be around 9-9.5% across sectors,” said Sandeep Chaudhary, performance and rewards consulting practice leader at Hewitt Associates. “Companies will focus on a more realistic approach towards salaries as well as hiring,” he added.
The hikes, in some cases, are simply a function of industry dynamics. In others, it is a mixture of desperation and hope.
The auto industry grew at a rapid pace last year and was one of the first to benefit from a rise in demand. With competition increasing and a slew of launches being planned, companies are leaving nothing to chance. Market leader Maruti Suzuki is looking at a 10-15% hike, up from last year’s 8-10%. It also plans an average bonus payout of 100% across levels like last year. “It will be an extremely challenging period in terms of retaining and hiring people. We are beefing up our R&D capabilities and need resources in other segments of the business too,” said SY Siddiqui, managing executive officer (administration, HR, finance & IT), Maruti Suzuki India.
The aviation industry was brutally savaged last year. With air travel picking up, companies are hoping to reward disgruntled employees who put up with a 15-20% average salary cut in 2009. Airlines also have to contend with poaching from rivals, which is a big issue in this sector.
But when it comes to bonuses, there’s nothing to beat what mobile telcos have been offering. Companies like Bharti Airtel, caught in a bitter tariff war, had offered its junior-level employees (with 2-3 years experience) an average of 140-150% bonus last year, while people at the senior level (with 15-20 years experience) received an average bonus of 125%.
Textile, aviation sectors too plan to give hikes this year
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