Mumbai: Wages in India are expected to rise by 14.4 percent in 2008, a fifth year of double-digit growth as companies fight for talent in a booming economy, human resource consulting firm Hewitt Associates said on Wednesday.
The firm's annual 14-country survey showed salaries in India rose 14.8 percent rise this year, a growth rate that trailed only a 15.3 percent increase in Sri Lanka, where high inflation has boosted wage rises.
"Companies tend to be conservative in giving their future salary projections and it wouldn't be a surprise if the actual percentage increase is closer to 15 percent," Nishchae Suri, head of Hewitt's Talent and Organization Consulting Analytics practice in Asia, told Reuters of the outlook for 2008.
Vietnam was the only other Asian country to post a double-digit rise in wages this year, with a 10.3 percent rise seen. The survey found wages in China were up 8.6 percent in 2007. India's economy has grown at an average rate of 8.6 percent in the last four fiscal years, and it is expected to sustain similar levels of growth in the year ending March 2008.
Skills shortages have led to a sharp increase in wages in many sectors. "With more opportunities and avenues, organisations are increasingly at the mercy of employees making a choice," Suri said.
Hewitt surveyed 262 companies in India, and none reported a salary freeze in 2007 and none expected a freeze for 2008.
"Wage price inflation is a matter of serious concern," said Suri, who recommended firms use more variable salary components that were linked to performance. Stock options were the most popular form of long-term incentives among surveyed firms.
Employees at the junior management level received the highest average wage increase of 16 percent this year, and are expected to get a 15.6 percent increase in 2008, the survey found.
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