– Mercer’s Total Remuneration Survey confirms that Indian companies are returning to pre-pandemic salary increases of 9-9.5%.

– Sectors such as technology, healthcare, services, and global capability centers saw better-than-expected salary increases due to the pandemic’s tailwinds, including the accelerated shift towards digitalization and increased demand for healthcare products and services.

– Indian companies are moving towards performance-based compensation packages for senior executives through higher variable pay and performance stock units (PSUs).

According to a recent survey by consulting firm Mercer, Indian companies are planning to return to pre-pandemic salary hikes ranging from 9-9.5%. The survey also found that most industries including manufacturing, consumer and retail, chemicals, and automobiles have returned to pre-pandemic levels of investment in rewards and incentives after a brief dip in 2020.

While some sectors have decreased their salary forecast to 7-8%, most sectors were able to adapt and even thrive during the pandemic and post-pandemic in India. Consequently, the salary increases in sectors such as technology, healthcare, services, and global capability centers were better than expected, as they were buoyed by tailwinds such as the accelerated shift towards digitalization, increased demand for healthcare products and services, and the subsequent emergence of medical tourism.

However, Singhal, senior principal of Rewards Consulting Leader India, noted that India Inc. is experiencing layoffs in select sectors due to global inflation and recessionary headwinds. Therefore, Singhal recommends cautious optimism, accelerated domain and performance-based differentiation, and reviewing of benefits for maximizing returns on investments.

The survey also revealed that in 2022, Indian companies saw a growing trend of performance-based compensation packages for senior executives through higher variable pay and using performance stock units (PSUs). Global MNCs operating in India have a standardized rewards strategy with a higher focus on monetary rewards and performance-based incentives, pay positioning is mostly at median, and pay ranges are narrow with low overlaps. In contrast, Indian headquartered firms have positioning based on levels, functional or skill differentiation, and pay range spread of up to 200%.

Overall, the survey confirms that Indian companies are focusing on growth in 2022 and plan to revert to pre-pandemic salary hikes. However, companies need to adapt to the changing business environment and embrace performance-based compensation packages to retain and attract talent in a competitive marketplace.

———

#IndiaInc #PayHikes #PrePandemic #MercerSurvey #PerformanceBasedCompensation #SeniorExecutives #Digitalization