India’s salaried class, looking for a handsome pay hike this year, may have enough reasons to cheer.
Salaries in India are expected to increase by 10% in 2019, marginally more than last year’s expectation of a 9% raise, according to the management consulting firm Korn Ferry.
However, inflation is likely to shave off some of the hike and, as a result, real wage growth in the country is expected to be capped at 5%.
The Korn Ferry 2019 Global Salary Forecast is based on the Los Angeles-based firm’s pay database, which contains data from over 20 million employees in 25,000 organisations across more than 110 countries. Salary hikes are predicted by global human resources departments and 2019 inflation forecasts are from the UK-based Economist Intelligence Unit.
Korn Ferry’s findings are in line with global advisory firm Willis Towers Watson’s research from October last year. It also predicted Indian salaries would rise by an average 10% this year, chalking it up to progressive reforms and cautious optimism across sectors, in addition to steady economic growth.
“Consequent to rapid economic growth, India continues to enjoy the highest overall salary increases and real-wage growth in Asia,” said Navnit Singh, chairman and regional managing director, Korn Ferry India.
Overall, the continent had a mixed bag of performers with major economies like China and Japan posting lower inflation-adjusted wage increases than last year, while others such as Vietnam, Indonesia and Singapore clocked higher real wages.
Even when adjusted for inflation, wage increase in India is the highest in Asia, Korn Ferry data revealed. In fact, India’s posting a strong growth at a time when, globally, real wages are taking a hit. Global average wage increase is expected to be just 1% in 2019, compared with the 1.5% prediction made by experts in 2018.
“With inflation rising in most parts of the world, we’re seeing a cut in real wage increases across the globe,” said Bob Wesselkamper, Korn Ferry global head of rewards and benefits solutions. “The percentage of salary increase or decrease will vary by role, industry, country and region, but one thing is clear; on average, employees are not seeing the same real pay growth they did even one year ago.”