Pay increases will witness a marked decline this year as against the year before and perhaps be the lowest in a decade as per a survey conducted by Aon Plc. Companies are expected to increase their average pay for employees by around 9.1 per cent in 2020 as against 9.3 per cent in 2019 and 9.5 per cent in 2018.
The economic slowdown, job losses and growing uncertainties leading to reduced consumption are prime factors in the reduced pay hikes. The report revealed that India leads in the Asia-Pacific region in salary increases but this is attributed to high inflation and a war for key talent and niche skills.
Speaking to the media Tzeitel Fernandes, partner for reward solutions at Aon said that there is an air of caution about the country’s economy and clarified that weak consumer sentiment and low GDP projections have led to the company’s lowest prediction.
E-commerce companies and start-ups are expected to dole out bigger hikes at around 10 per cent on an average while financial institutions may increase salaries by around 8.5 per cent. Auto sector which was under pressure over the last year due to BS-VI emission norms, e-vehicles entry and general slowdown is expected to see salary hikes of 8.3 per cent as against 10.1 per cent in 2018.
The Aon survey studied over 1,000 companies across over 20 industries.
