Despite the slowdown and turmoil in financial markets, private sector employees have received or can look forward to an average salary increase of 15 per cent this year, roughly the same as the year before but lower in real terms because of the inflation rate, which is ruling at 8 per cent.
Still, this is better than most markets - 5.5 per cent in the US and 8 per cent in China, for instance - mainly thanks to the talent crunch and rapid growth in many sectors.
"Given the slowdown, companies are being cautious. Average increases will be 7 to15 per cent though top performers will still get 25 to 30 per cent, '' said K. Sudarshan, managing partner (India) for executive search firm EMA Partners International.
HR firm Hewitt Associates, however, estimates average salaries in India rose 15.2 across sectors for 2008-09 in line with the increases last year (15.1 per cent) and better than the year before (14.4 per cent) despite slowdown in many sectors.
``The growth in salaries is due to lack of talent in the market while companies are growing at a fast pace (30 to 35 per cent in telecom, retail). The supply is not keeping pace with the demand. There's a 10 to 15 per cent shortage of talent across various levels,'' said Nitin Sethi, consulting leader, South Asia, Hewitt Associates.
At 15.5 per cent, salaries of people in junior management (up to seven years) rose the fastest, followed by middle management (seven to 12 years) at 15.2 per cent, senior management (12 years+) at 14.5 per cent while salaries of CEOs increased 13.6 per cent.
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