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New Delhi: Salaries in India are set to rise at the fastest pace in the world this year as a real-estate boom and the addition of capacities spur demand for skilled people, Hewitt Associates Inc. said.
Wages in India will rise an average 15.2 per cent this year, the sixth successive annual increase of more than 10 per cent, Hewitt Associates said at a news conference on Tuesday in New Delhi.
This follows an increase of 15.1 per cent last year, 14.4 per cent in 2006 and 14.1 per cent in 2005, the Lincolnshire, Illinois-based human resources consultant said.
Companies such as Atos Origin SA, France's second-largest computer services provider, plan to more than triple workforce in India by the end of next year. Reliance Power Ltd, which raised a record $3 billion in an initial sale last month, plans to hire 5,000 people to execute 13 power projects. To retain skilled employees, companies are raising salaries while offering higher wages to lure people from rivals.
"The struggle for talent and sustainability is large and rapidly growing in India," said Sandeep Chaudhary, leader of Hewitt's rewards consulting practice in India. "Organisations are using compensation as a strategic lever in attracting, retaining and motivating talent."
The forecast follows the one made by ECA International, a human resources company, which estimated last month India may get the largest salary increases this year.
Wages in the country will rise 14 per cent this year, compared with 12.6 per cent last year, ECA said. That is faster than the 7.3 per cent rise in Asia and the global average of 5.9 per cent.
Hewitt said it surveyed 540 companies in India from November to January.
Economic expansion in India is the fastest after China among the world's biggest economies.
GDP growth
The gross domestic product has grown an average 8.8 per cent in the last four years, the fastest expansion since the country's independence in 1947.
Salaries in the country are rising at a faster pace than in rest of the world because the number of skilled people being produced by educational institutes lags behind demand generated by the faster pace of economic growth.
"It is a paradox of plenty," said Hewitt's Chaudhary. "We have the second-highest population but a shortage of talent."
Leaders: Real estate to lead hikes
Real estate and related infrastructure industries will probably see the fastest pace of salary increases of about 25 per cent this year, Hewitt said.
The telecommunications industry may see a salary increase of 17.6 per cent from the previous year, the human resources consultant said.
The electronics and electrical industry will probably report the slowest pace of wage increase of 12.8 per cent this year, Hewitt said.
The average rate of attrition was 22 per cent to 24 per cent last year, Hewitt said. The insurance industry reported an attrition rate of 35.2 per cent, it said.
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