New Delhi: Pay increases across India’s organized sector will probably grow at the slowest pace since 2009 this year, according to a survey from Aon Plc.
Companies will increase average pay by 9.1% in 2020, down from 9.3% in 2019 and 9.5% the previous year, Aon said in a report published Tuesday. The small increase reflects a deep slowdown in Asia’s third-largest economy, where growing pessimism about job prospects have led many to cut down on consumption — the main driver to growth.
India still leads the Asia-Pacific region in pay rises, but that is mainly due to higher inflation and a “war for key talent and niche skills,” Aon said.
“There is a general air of caution about the economy as we enter into 2020,” Tzeitel Fernandes, partner for rewards solutions at Aon, told reporters in New Delhi. “Low GDP projection and weak consumer sentiment are the reasons behind our lowest ever prediction.”
E-commerce companies and start-ups will probably get the biggest salary increases, projected at an above-average 10%, while financial institutions will hand out 8.5%. Unsurprisingly, the auto sector witnessed the biggest drop in growth — down to 8.3% from 10.1% in 2018, according to Aon.
The survey covered more than 1,000 companies across over 20 industries.
–With assistance from Anirban Nag. – Bloomberg
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