22% Hikes Out for Delivery in Ecomm

Shortage of talent to drive up increments for best performers across most sectors

Salary hikes are tipped to go on an overdrive this increment season with top performers in FMCG, oil & gas, industrial goods, retail, transport, technology , etc, set to earn increments in excess of 20%.

Average increments in most sectors are expected to be in double digits, according to estimates from leading talent and compensation firms, Hay Group, Mercer, Aon Hewitt, Towers Watson and TeamLease. These firms are also in consensus that top performers will earn almost double the average increment. This has set expectations of 20%plus hikes for top performers.

“This year, the differentiation (between top and average performers) is higher. Companies are paying double to their top performers compared with average peers to retain them,“ said Ajit Isaac, chairman of Quess Corp (earlier Ikya Human Capital Solutions). “There is expected to be big supply-demand gap, and some terrific success stories of companies along with good earnings per share is making the differentiation sharper,“ said Ajit Isaac of Quess Corp.

The ecommerce industry is expected to roll out an 1822% raise on an average compared with 10% last year. And the IT industry is also expected to dish out one of the largest variable payouts of the year.

“Demand far exceeds supply in the ecommerce sector at the moment as it’s witnessing a huge surge in interest and expansion. Attracting and retaining talent is a priority to ensure seamless expansion,“ said Rituparna Chakraborty, co-founder & senior vice-president of TeamLease Services. The ecommerce sector, with revenues of over $12 billion, is expected to hire more than 1 lakh employees in the next six months. Top performers in ecommerce firms may get up to 30% pay hikes.

The technology sector, fighting to retain key talent while also shedding flab, will clamour to retain employees with a flair for new skills.

“The hi-tech industry will see higher increments because of the increasing demand for IT and IT-related services from the other economies,“ said Sambhav Rakyan, Data Services practice leader, Asia Pacific, Towers Watson. This industry , which is on a drive to make itself lean, has also been announcing 100% variable payouts. While Towers Watson says the technology sector can roll out 10.7% raise, up from 10.5% in 2014, TeamLease says demand for niche talent while adopting automation could see employees get even 18-22% raises this year.

The manufacturing sector is likely to see higher increments this year. This, said Shanthi Naresh, Mercer India business leader, Information Solutions, is due to “an upturn due to improved business pipeline (especially companies in the capital goods sector) and the impetus being given to this industry through the government’s focus on the `Make in India’ campaign“.

Average increments in the consumer industry are pegged at an estimated 11.9%, which is at par with last year.

Those in the automotive space will get lower increments this year. The sector will see a 10% raise compared with 10.5% last year, those in telecom will get a barely 5% raise compared with 7% last year. “The fallout of the 2G scam and a lukewarm pick-up of 4G is largely responsible for the negative sentiment around telecom. Costs are going up, making survival difficult for most players,“ said TeamLease’s Chakraborty.

In 2015, the average raise for India Inc is expected to touch around 11.3% compared with 10.9% across industries, says the Hay Report.

Source: The Economic Times

Date: January 29, 2015

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