The average salary hikes in India are expected to be 10.2 per cent in 2023, marginally lower than 10.4 per cent in 2022, EY said in its new report on Tuesday. The salary increases are expected to be lower in all job levels except blue-collar jobs.
The top three sectors expected to see the steepest salary hikes are e-commerce, professional services and information technology, EY said in its “Future of Pay 2023” report.
“The top three sectors with the biggest forecasted salary increases are tied to technology. E-commerce has the highest projected salary growth at 12.5 per cent, followed by professional services at 11.9 per cent, and information technology at 10.8 per cent,” it said.
In 2022, these three sectors recorded an average salary hike of 14.2 per cent, 13 per cent and 11.6 per cent, respectively.
The report added that attrition in India had shown signs of easing. At 21.2 per cent, it is now below 2021 levels. The voluntary attrition rate was 16.8 per cent, and the involuntary was 3.6 per cent.
The top reasons behind high voluntary attrition were limited career growth opportunities, inequity in compensation, role stagnation and lack of recognition.
The financial institutions, e-commerce and technology sectors recorded the highest attrition at 28.3 per cent, 27.7 per cent and 22.1 per cent, respectively.
The lowest attrition was recorded in the metals and mining sector (8.2 per cent), hospitality sector (9.1 per cent) and aerospace sector (10.9 per cent).
The report also highlighted that technology skills like AI and cloud computing are in high demand. These command a 15-20 per cent premium over basic software engineering compensation. Analytical skills like risk modelling, data architecture and business analytics command a higher 20-25 per cent premium.
Nearly half, 48 per cent, of the companies in India offered a premium for the skills in demand. 22 per cent even offer one-time and retention bonuses to those with skills in demand.
“As the Indian economy continues to grow, competition for top talent is intensifying across various industries. Top talent with critical skills and high-performance history command compensation premiums ranging from 1.7 to 2X of average talent,” said Abhishek Sen, partner and Total Rewards Practice leader, Workforce Advisory Services, EY India.