Annual Salary increments in India this year (2015)

Posted by:   Prakash Kewalramani Date:Aug 01, 2015

Annual Salary increments in India this year (2015)


By now, most organizations would have completed their annual employee appraisal cycle.

The past few years have been stressful for Indian professionals. A number of organizations had given increments a pass in 2014 (and some, since 2013).

So, how has been the scene on the increments front this year? Although, this year too some organizations skipped increments, a reasonably large number of organizations have in fact opened up their purses and doled out increments. However, the quantum of increments has been quite modest as compared to the boom times of the latter half of last decade.

So, why the increments? The economy has not picked up, company margins are under pressure. The increments being doled out have more to do with employee retention strategies than actual company performance. Organisations continue to focus on performance and delivery: reward performers and let non-performers get the right message.

Our July poll clearly indicates:

  • 42% of the respondents felt annual increments this year would be  6-10%
  • 33% of the respondents felt annual increments this year would be 11-15%
  • 16% of the respondents felt annual increments this year would be above 15%

Realistically, the average increment this year at the macro level would be around 11%, although very good performers would have snagged over 15% and top performers getting even 20%-30% increases. Low & non-performers in organizations would have got zero increments if not matching orders. This increase of 11% even after adjusting for 5% inflation in India, still compares favourably with increments in other countries which range between 2% and 8%.

The variations in increments across industry verticals and across management levels is marginal.

Even in terms of performance bonuses, the quantum has been modest although amongst the highest bonuses given is in investment banking (Rs. 2 crores). But this has more to do with the hyperactivity in M&As in the ecommerce space.

So, where does one go from here?

The BJP government at the center has completed 25% of its 5 year term and till now there have been no significant policy initiatives to prime the economy. The stock market continues to be directionless. Organizations still continue to await the dawn of the much-promised "achhe din". There is cautious optimism. But, for the economy to get into top gear, it will easily take 3-5 years.

As the head of a leading PE fund (having extensive exposure in core sectors) told this writer today: we are still to see smiles on the faces of Indian professionals.

Tough times continue!


About the Author:

Prakash KewalramaniPrakash Kewalramani is the promoter of Impact HR Services since 1994 and since 2015. An engineer from IIT-Delhi and MBA from IIM-Ahmedabad, Mr. Kewalramani has over 17 years experience in Senior Management, Executive Search and Marketing with reputed multinational organisations. Mr. Kewalramani is a past-Chairman of ERA (Executive Recruiters Association) and is the current Chairman, Ethics Committee, ERA. 

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