High rise in real estate salaries

Employees in India received an average salary increase of 15.1 per cent in 2007, which is up from 14.4 per cent in 2006, according to the 12th annual Salary Increase Survey conducted by Hewitt Associates, a global human resource services firm. The report also predicts a rise of 15.2 per cent in 2008, making this the fifth consecutive year that salaries have shown a double-digit growth in India.

Real estate or infrastructure leads with highest salary increases leaving traditional leaders like Information Technology and Business Process Outsourcing behind.

While salary increases are largely dictated by talent demand and supply, Hewitt Associates forecasts a gradual decrease in salary increases and a stabilisation of increases to a range of 9 to 10 per cent by 2012. Factors influencing stabilisation include reducing the talent gap, changing the talent model, making training vital and re-engineering talent.

Though the fundamentals of the Indian economy are strong, the recent stock market fall and a strengthening rupee herald uncertainty. For India, the immediate implications of an economic slowdown in the U.S. is not worrying, but this is getting organisations to look at “productivity” as a single most important determinant of long-run prospects, the survey says.

The two fastest growing cost components in India are real estate or infrastructure and talent, and information technology and outsourcing companies, which have more than 75 per cent of production regulated by the U.S. economy. The highest increase in salaries is predicted in the middle management, junior manager and supervisor levels ranging close to more than 15 per cent while the top and senior management are likely to witness a hike of 13-14.5 per cent in 2008. For the general staff and manual workforce, the hike predicted is between 11 to 13.5 per cent.

The study also reveals that an increasing number of organisations are plagued by attrition and retention issues. Attrition rates have reached an all-time high in India with the insurance industry reporting the highest attrition rate at 35.2 per cent. This is followed by IT-enabled services at 28.9 per cent and hospitality industry at 27 per cent. External equity of compensation, role stagnation and limited career opportunities are the most cited reasons for attrition.

Hewitt Associates surveyed 600 foreign-owned, locally owned and joint venture companies this year, analysing information across 19 primary industries and 22 sub-industries.

source