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India to see a 10% salary increase in 2020, Willis Towers Watson Survey finds

India’s projected salary increase is highest in Asia Pacific

Total Rewards|Compensation Strategy & Design
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November 5, 2019

Salaries in India are projected to rise 10% in 2020, marginally higher than the actual increase (9.9%) in 2019, according to the latest Q3 2019 Salary Budget Planning Report released by Willis Towers Watson.

New Delhi, 05 November 2019 — Salaries in India are projected to rise 10% in 2020, marginally higher than the actual increase (9.9%) in 2019, according to the latest Q3 2019 Salary Budget Planning Report released by Willis Towers Watson (NASDAQ: WLTW), the leading global advisory, broking and solutions company. The report looks at a range of job grades across various industry sectors and is designed to provide companies with guidance for their annual salary forecasting for the year ahead.

Figure 1: Projected and actual salary increase
Year Projected salary increase Actual salary increase
2020 10.0% -
2019 10.0% 10.0%
2018 10.0% 10.0%
2017 10.0% 10.0%
2016 10.0% 10.0%
2015 10.0% 10.4%

While salary increases in India are stabilising around the 10% mark, they remain the highest in the Asia Pacific region. Indonesia is projected at 8%, China at 6.5%, Philippines at 6%, Hong Kong and Singapore both at 4%.

Sharing his perspective on the findings, Rajul Mathur, Consulting Leader – Talent & Rewards, Willis Towers Watson India said, “Though salary increases in India still continue to be among the highest in the region, companies are taking a cautious approach and do not intend to make any significant changes from previous years. Companies are beginning to make selective skill-based compensation adjustments to cater to requirements around automation and digitisation. Going forward, organisations should continue to re-examine the alignment between their business and talent strategies, as well as how to remunerate and reward different segments of the workforce considering their core contribution to business success.”

Economic outlook and hiring trends

Of the surveyed companies, 28% have projected a positive business revenue outlook for the next 12 months, down from 37% in 2018. Whereas, 61% expect no big change as compared to 57% last year; and, 11% have a downward revenue projection compared to 5% in 2018.

With the cautious business outlook, recruitment efforts are expected to slow down. The survey shows that only 22% of the organisations in India plan to add new headcount compared to 29% last year. Organisations planning to maintain their current headcount increased from 63% in 2018 to 70% in 2019; while, 7% plan to reduce headcount as compared to 8% last year.

Hiring has been stable across sectors like High Tech, Shared Service Outsourcing, Pharmaceuticals, Energy, Retail and Chemicals, while Captives continue to ramp up and expand with newer lines being introduced or insourced into the India operations. However, hiring has slowed down markedly for Automobile, Auto Ancillary and Engineering.

Sectoral trends

While most sectors like General Industry, Chemical, High Tech and Pharmaceuticals can expect salary increases around average mark of 10%, Energy, Financial Services and Consumer Products sectors stand out for the highest year on year growth. The Energy sector is expected to see a jump from 8.5% in 2019 to 9.3% in 2020, the Financial Services is projected at 9.7% in 2020 from 9% last year and the Consumer Products sectors is expected to see an increase from 9.5% in 2019 to 9.9% in 2020.

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