With corporates facing shortage of talent, India is likely to witness over 14 per cent increase in salaries annually for the next three years even as there has been a sharp rise in input costs, a latest study says.
India, Vietnam and Indonesia are the only three countries in the Asia-Pacific region which are likely to see a double-digit increase in salaries until 2011, as per a report, soon to be released in India, by global human resource consulting firm Mercer.
“For India, although we forecast a slight downward trend, the country can still expect one of the highest pay increases in Asia-Pacific at more than 14 per cent up to 2011,” the Asia-Pacific Compensation report by Mercer stated. Across Asia-Pacific countries, salary increases in 2008 are expected to be higher than in 2007, with an easing expected in 2009, despite the slowing of most economies and weaker global scenario, the report forecast. “In India the salary increases are expected to be in double-digit for the next few years as companies are facing shortage of talent. This need for quality people is likely to boost the increase in salaries,” Mercer India business leader for information product solutions Gangapriya Chakraverti said.
Asked about the situation of wage rise in the IT sector, which is under pressure from the global slowdown Gangapriya said, the salary hikes in the sector would continue.
The hi-tech industry is showing signs of moderation in the high salary hikes offered in the past. Salary increases in 2008 are expected to be slightly lower than in 2007 in China, Indonesia, South Korea and Thailand.
Though India and Vietnam would continue to witness double-digit pay hikes in IT industry, Hong Kong is expected to experience stable salary rise in 2009, it added.
In terms of sectors, the financial services industry is likely to see the highest growth in salary increase, Gangapriya said.
Real Estate and infrastructure are also likely to witnesses aggressive increases in wages. But, manufacturing and engineering sector may experience a slowdown due to sharp impact of rise in input costs, Gangapriya added.