India Inc offered the lowest ever salary increments to employees in 2020 as COVID-19 disrupted the economy, said global professional services firm Aon. According to the ‘Salary Trends Survey 2020 - 2021' which captured responses of 1050 organisations spread across 20 sectors, the average salary hike in 2020 stood at 6.1 percent, which is the lowest level seen in 25 years of the survey.

The previous lowest average salary hike in India was recorded in 2009 at 6.3 percent during the global financial crisis. Average salary increment by Indian Companies for 2021 has been forecast at 7.3 percent by the Aon survey.

During the ongoing calendar year, 29 percent of the surveyed companies didn’t offer salary hikes while 46 percent gave increments in the range of 5 to 10 percent to their employees. In addition, 16 percent of the companies offered a salary hike of 10 percent.

Sectors with the highest salary increase in 2020 include hi-tech, IT, pharma and life sciences while hospitality, real estate, engineering services recorded the worst performance on salary.

Going forward, the number of companies offering increments are likely to increase in 2021, Aon said, even as the quantum of increments is likely to remain at levels seen in previous years. The survey forecast that in 2021, 14 percent companies are unlikely to offer any salary hike but more companies are likely to reinstate compensation cuts carried out in 2020 due to the pandemic. 61 percent of companies are expected to offer salary rise in the range of 5 to 10 percent. Further, as many as, 15 percent of the companies are likely to offer 15 percent hike in compensation next year, Aon said.

The survey also said that active hiring by Indian companies, that reduced workforce due to pandemic, was not expected till the third or the fourth quarter of 2021.

In addition, Aon predicted that companies across the board will seek to re-calibrate compensation to factor in Work From Home or Work From Anywhere modes, by including location-based compensation differentiation.

First Published:Nov 4, 2020 1:53 PM IST