India tops salary hike in Asia: Hewitt

By agencies   |   Sunday, 27 November 2005, 08:00 Hrs
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NEW DELHI: Average salary increase in India in 2005 is the highest in Asia, and this trend will continue in 2006, said HR consultancy firm Hewitt Associates in its annual study. In 2004 too, Indian companies were on top in terms of salary increase in Asia.

In 2005, the average increase in salary of employees of Indian companies was 13.9 percent. Employees in the IT-enabled sector received the highest hike at 17.9 percent.

Philippines recorded an average salary increase of 8.2 percent, followed by China at 8.1 percent and Thailand at 6.3 percent.

In India, employees at professional/supervisor/technical level received a hike of 15.7 percent, which is expected to remain at same level (15.6 percent) in 2006. In China, hike was at 8.9 percent in 2005 at manager level.

The study observed that fewer companies are implementing pay freezes in 2005. And the trend is likely to continue in 2006. In Korea, 5 percent of survey participants said they expect a salary freeze, compared to 4 percent in China, 3 percent in the Philippines and 2.6 percent in India.

According to the survey, none of the participating companies in Australia, Malaysia, Taiwan or Thailand expect salary freeze in 2006.

The trend of linking objective to performance continues to be popular in Asia. In India, 90.4 percent of the 270 respondent organizations linked their salary increases to performance ratings, as compared to 76 percent in China.

The variable to fixed pay ratio will likely to increase in most countries, except Singapore, in 2006. In India, senior or top management gets 19.4 percent of salary in cash as variable payout. This is expected to touch 21.1 percent in 2006.

The percentage of employees receiving variable pay was the highest among senior/top management at 74.8 percent, followed by professional/supervisor/technical and managerial levels at 70.7 percent and 70.1 percent respectively. Stock options remained the favored long-term incentive.

Because of increased demand of trained workforce, attrition is a growing concern in Asia. The highest employee turnover rate was recorded in Philippines at 18.1 percent, Taiwan at 17.7 percent, China at 14.4 percent and India at 13.1 percent.

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