The salary hikes are reportedly happening across sectors right from IT and financial services to manufacturing. The increases are expected to be in line with what companies had paid in 2007-08.
After year of uncertainty over salary hikes companies across the board are finally looking at doing out increments and bonuses this year.
The move is backed by a string growth in earning reported by corporates in the December quarter, as India Inc emerges out of downturn. Besides, all proxy indicators of revival and growth such as steel consumption cement off take and production of trucks and overall higher spends by consumers on durables and cars are believed to have contributed to the feel good factor. The salary hikes are reportedly happening across sectors right from IT and financial service to manufacturing while no one is committing a fixed number; but increases are expected to be in line with what companies were offering in 2007-08 a year that witnessed one of the biggest increments in corporate India.
After a year of no or marginal pay hikes 1.5 lakh TCSers will have a reason to cheer for in the new financial year. Salary increments are definitely in the offing. India’s largest private sector employer will also continue to ramp up its headcount to meet its growing demand for its services.
In April 2008, TCSers had got a 10% salary hike. It doled out 150% of the quarterly component of the variable pay during the last six months. In the December quarter, the company’s revenues rose 5% to Rs 7,649 crores while its net profit increased 34% to Rs 1,824 crores.
While Infosys is also said to be offering similar hikes, the buzz is around Wipro is that things could get even better.
For the fast moving consumer goods (FMCG) sector too, the mood is upbeat. The outlook for the FMCG sector as far as employee remuneration goes is definitely a positive one vis-à-vis the year gone by.
As with most leading companies, at GCPL the compensation structure is broadly categorized into the fixed and variable components. In the fixed components, we envisage an average increase in line with market projections by organizations like Hewitt. The variable component, which does not have a fixed cap and depends on our calculations for Economic Value added in 2009-10, is expected to be significantly more than last year on account of improved business results.
Another FMCG company, Emami said that it is considering pay increases for April. Last year too, we had given hikes, and good performers will be rewarded this time too.
Financial services are no different. There’s a lot of business activity especially in investment banking and equity research. As a result, companies are beefing up their teams. Most of the investment banks have already paid bonuses. However, this time a large component of around 75% was given in the form of stocks, while the balance was cash. This is in stark contrast to what was witnessed in 2007, when only 20-25% was in stocks.
At consumer durables major Samsung, which registered a growth of 30% in 2009, the increment given out in 2009 were in line with that in 2008.
Samsung did not feel any undercurrents. Bonuses and incentives to employees were given and we announced a performance incentive for 2009, At Samsung India, every Six months, there is a performance bonus based on the company’s performance in addition to a Diwali bonus.
According to industry sources, across the consumer durable industry as a whole, the 2008 increment was around 15 – 20% over that of 2007. Even in 2009 most firms paid out increments of around 10% – 15%.
There were no job cuts either. The durables sector was the only one to buck the trend since growth was more than 15% in both refrigerator and washing machine businesses. Even TVs notched up a growth of more than 5%. Now with further revival in the economy, the 2010 bonuses in the durables sector are expected to be way better.
Signs of increasing confidence in the economy are also evident at India’s leading car battery manufacture, Exide Industries, which has recently lifted the freeze on recruitment that was imposed at the beginning of 2009.
The company which had not given pay hikes last year in April, has since given salary increases with effect from October 2009.