'India salary hikes will be highest in region'

Salary increases in India this year is projected to be the highest in the Asia Pacific region at 10.8%, according to HR consultancy firm ECA International. The firm released its latest salary trends survey findings on Tuesday.

Even as almost a third of Asia Pacific-based companies surveyed plan to put salary increases on hold, and salaries in Japan, Taiwan, Hong Kong and Singapore have recorded the biggest downward adjustments, some Asian countries, including India, Vietnam and Indonesia, may still see big increases in 2009, the study predicted.

However, the survey points out that since the annual inflation figures are also significantly lower than what they were (oil and food prices have fallen from the highs last year), the real wage increases may not differ significantly from last year in some markets.

ECA regional director-Asia, Lee Quane, said, "There is still a huge demand for talent in India that is keeping pay increases high despite the current economic situation. While, in Vietnam and Indonesia, persistently high levels of inflation are keeping increases up."

The survey stated that pay rises across Asia-Pacific are down 40% from hikes predicted prior to the global economic crisis and almost one-third of firms surveyed are planning to put salary increases on hold.

According to survey, pay hikes in the Asia-Pacific region are expected to average at 4.8% in 2009, a drop of 30% from last year's 6.9% increases.

This is almost in tune with the salary increase surveys released earlier this year by other HR firms, which predicted a 7.5-8.5% salary increase in India and projected the increase to be the highest in the world.

India Inc will report an average salary increase in single digit at 8.2% or lower this year, down from 13.2% in 2008, another HR firm, Hewitt Associates, had projected.

Despite the dip to be witnessed, India will fare better than its immediate and extended neighbours as the expected salary increase estimates continue to be the highest in the Asia Pacific region and among the highest globally, according to the a global human resources consulting firm that conducted a survey across 480 companies across sectors.

Sandeep Chaudhary, leader, Hewitt's performance and rewards consulting practice, said, "Expectedly, salary increase projections have dipped from previous years. Still, the Indian and Chinese economies are continuing to grow at greater than 7%, and salary increases in these markets will be among the highest in the globe. In fact, with inflation well below 5.5%, an average increase of 8.2% can be considered significantly healthy."

Chaudhary, however, cautioned against taking such salary increases at face value as lower salary increases in the US or other developed economies is taking place at a much higher base, which implies that the highest salary increases in India will not match the developed economies in terms of salary levels.