“The hiring frenzy of 2022, when actual salary hikes were at 10.6%, is behind us. The projected hikes for 2024 are expected around 9.4%, which is on a par with actual increments of 2023,” said Roopank Chaudhary, partner, human capital solutions, India, Aon.

According to the early data analysis shared with Mint, Aon said while engineering companies might roll out a 10.1% hike compared with 10.5% in 2023, the energy sector could see an 8.8% rise in 2024 versus 8.5% this year. Salary hikes in fast-moving consumer goods, chemical, and retail will be similar to last year’s levels, with projected figures of 9.8%, 9.6%, and 10.1%, respectively, against 9.7%, 9.6%, and 10.1%, rolled out this year.

“While inflation is expected to ebb in the coming year, the spectre of global recession has made firms cautious. The significant drop in attrition numbers this year also led to hikes being muted,” he added.

However, the e-commerce industry and professional services may increase their increments to 10.7% and 10.5%, from 10.1% to 9.4% in 2023.

Consulting and audit firm Deloitte said firms are factoring in events such as the 2024 general elections while preparing for the increment cycle. “The coming financial year will have large macro factors in India (polls, etc.), and it always has an impact on the business fundamentals such as overall spending,” said Anandorup Ghose, a partner at Deloitte India.

“Some of that will have a rub-on effect on firms focused on India as their core market.”

WTW estimates India Inc. to offer a median hike of 9.8% in 2024, lower than the average increment of 10% in 2023.

“However, being an emerging market, salary increases in India continue to be the highest across the Asia-Pacific,” according to global advisory, broking and solutions company WTW’s Salary Budget Planning Report.

While hikes may be muted, companies will raise compensation scales for niche skills since retaining them remains a challenge.

Consulting firms expect companies to try to bring in sharper differences when paying top performers, which is often 1.7 times the median salary hike.

“It’s been a trend for some time that companies are keeping average increases muted while working on the edges to ensure the right skill is rewarded disproportionately,” Ghose added.

Compared with Indian firms’ estimation of 9.8%, Vietnam is projected at 8%, followed by China (6%), the Philippines at 5.7% and Thailand at 5%.

The IT sector is estimated to implement a 10% hike, similar to last year. The report said more than one-third (36%) of the companies had projected a positive revenue outlook for the next 12 months in the June quarter of this year compared to 42% in the previous year.

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Updated: 02 Nov 2023, 11:20 PM IST