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Upbeat India Inc lining up salary hikes: Mercer

More than 30% of the cos surveyed in India said they will expand their workforce and another 37% expect replacement hiring. Job vs health I How to bag a great job

, ET Bureau|
Jul 30, 2009, 06.04 AM IST
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NEW DELHI: Almost all Indian companies have given or will give their employees a pay hike this year, a survey showed, pointing to optimism in corporate India that the economy is on the rebound.

One in every two companies in India raised the salaries this year, and most of the rest plan to do so before December, human resources consulting firm Mercer���s survey found.

Covering 2,100 companies globally, including 87 in India, the survey revealed that Indian companies consider workforce reduction as the last resort and will continue to adjust employee salaries with inflation. Aditya Birla Group director for corporate HR Santrupt Misra said that apart from concerns regarding liquidity and availability of capital in the latter half of the last fiscal, Indian corporates are quite optimistic about the economic environment.

���So, it was important they continued benchmarking salaries according to the prevailing market levels. Another reason could also be that the Indian economy witnessed inflationary trends during 2008, which is why many companies might have opted for salary increases.���

ET has reported that companies such as Bharti Airtel, PepsiCo India, Dabur, Fortis Healthcare, SRF, Maruti Suzuki, LG Electronics, GE, Dabur, Siemens, Bisleri, Merck and Sharp & Dohme, Dr Reddy���s Laboratories and Ceat Tyres raised employee pay this year.

Consumer goods company Dabur India is among those which is in the process of increasing salaries. ���We have already given salary hikes of about 10% to non-managerial employees in April. We are now reviewing salaries of our managerial staff, which would be an average of 12%, while top performers will get up to 15%,��� said executive vice president (HR) A Sudhakar.

He added that salary increments have been given keeping in mind increasing business confidence and what competition is doing. Dabur, a maker of juices and beauty products, is part of fast-moving consumer goods industry which has been largely unaffected by the economic slowdown.

The Indian edition of the survey, conducted with industry body CII, included firms such as Nestle India, L&T, Standard Chartered Bank, Max New York Life Insurance, Johnson & Johnson, Bajaj Electricals, Fortis Healthcare, Saint Gobain Glass, SRF, Genpact, Cisco and Oracle. Made available exclusively to ET, it revealed a rosier picture in India compared to the rest of the world.

Globally, two-thirds of companies said that their salary budgets were either cut or stagnated compared to 2008. While just one in six Indian companies resorted to wage cuts, one in every three firms internationally pruned employee salaries.

���In the short term, many organisations might have had to tackle people costs with wage freezes and retrenchment, but with recovery around the corner companies seem to be taking active steps to manage and retain their key talent. Companies are now gearing up to be ready for growth opportunities once the upturn comes about,��� said Mercer India MD Padma Ravichandar.

The survey also showed a significant proportion of companies continuing with their hiring plans. More than 30% of the companies surveyed in India said they will expand their workforce and another 37% of the companies expect replacement hiring.

The rest said they would fill key posts even though overall staff numbers may come down. Furthermore, companies are also changing the employee mix by hiring more temporary staff and replacing highly-paid expatriates with local talent. Indian firms are also trying to bring down the compensation of expats they have hired.

Besides hiring, companies are focusing on the health of employees this year by introducing wellness programmes. ���We have organised specific healthcare and awareness programmes every quarter, associated with various lifestyle diseases like diabetes and cardiovascular diseases,��� said PepsiCo India ED-HR Pavan Bhatia.

In India, around 40% of the companies surveyed said they are likely to add wellness programmes too, and around one in five said they are likely to provide health-related services in the workplace.
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