Press Release

India to see a 10% salary increase in 2018: Willis Towers Watson Survey

India’s 2018 projected salary increase is highest in Asia Pacific

November 9, 2017
| India

New Delhi, November 09, 2017 — Salaries in India are projected to rise 10% in 2018, same as the actual increase in 2017, according to the Q3 2017 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
2018 10.0% -
2017 10.0% 10.0%
2016 10.8% 10.0%
2015 10.8% 10.4%

Although salaries in India are seeing a decreasing pattern in the year-on-year salary increases, India’s projected salary for 2018 is still the highest in the Asia Pacific region. Indonesia is projected at 8.5%, China at 7%, The Philippines at 6%, and Hong Kong and Singapore both at 4%.

Figure 2: Comparing India with key markets in the Asia Pacific region

Comparing India with key markets in the Asia Pacific region

Sharing his perspective on the findings, Sambhav Rakyan, Data Services Practice Leader, Asia Pacific at Willis Towers Watson said, “India continues to show high salary increments compared to other countries in the Asia Pacific region. However, given the decreasing pattern in the year-on-year salary increases, Indian employees could very well see a single digit salary increase in 2018 for the first time since 2011. Given this trend and the rapid evolution of jobs, skill and the future of work, especially for tech-savvy talent, requires companies to rethink their talent attraction and retention strategies and realise that simply increasing compensation is not a sustainable solution.

We are also seeing that progressive employers are beginning to leverage employee benefits as a strong lever in differentiating their employee value proposition and ensuring greater transparency in compensation and benefits related communication”, he added.

Salary allocation for top performers in 2017 increased to 39% up from last year’s 38%. On the other hand, the budget set aside for average performance budgets decreased by 1% to 27%.

Arvind Usretay, Director - Rewards - ‎Willis Towers Watson India explained,  "These changes are marginal, but as salary budgets get tighter it still reflects the sentiment of employers to reward top performers. Therefore, now we see more companies relying on robust processes, governance and training at driving linkages between performance and pay. We expect this trend to gather greater momentum in the next couple of years as companies sharpen their pay for performance policies.”

Salary increases by management level

The report highlights that executive salaries have plateaued and in some cases show a downward trend. However, in the mid-management level, the salary increase range is wide – from a 2-3% for average performers to 15% for top performers. The junior management salary increases will average around 10% but may have a wider range.

Sector trends

Among the industries covered in the report, the most notable projected salary increase is seen in the energy, FMCG and retail sectors. At 10.5%, these sectors are expected to do better than the overall projected salary of 10%. This is reflected in the focus on reforms in the renewable energy sector and convergence in online and offline in the retail sector. Whereas, the significant change in the projected salaries is expected in the pharmaceutical sector (from 11% in 2017 to 10.3% projected for 2018). Notably, at 9.1% the financial services is the only sector where the projected salary is less than the overall projection.

Rakyan added “Given the labour arbitrage advantage, segments such as back office operations based out of India can be expected to offer above average increases. Start-ups and smaller MNCs are also likely to offer above average salary increases to attract and retain critical skill employees”.

Figure 3: Industry specific salary increase budget

Industry specific salary increase budget

The report also highlights that the top three functions companies are looking to recruit in the next 12 months are engineering, finance and marketing.

Notes to editors

About the survey

The 2017 Asia Pacific Salary Budget Planning Report is a bi-annual survey compiled by Willis Towers Watson’s Data Services Practice. The survey, timed to coincide with companies’ compensation planning for 2018, looks at a range of industry sectors and job grades from factory shop floor to executive suite, and focuses on salary movement and review practices.

The industries covered include business process outsourcing, chemicals, construction & engineering, consumer products & retail, financial services, high tech, manufacturing, media, pharmaceutical & health sciences, business & technical consulting and transportation & logistics. The survey was conducted in July 2017. Over 4,000 sets of responses were received in Asia Pacific, in which about 300 companies participated in the India market.

About Willis Towers Watson

Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 40,000 employees in more than 140 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.