Indian employee salary: Indian employees are expected to see their median salary increase by 10% in 2023: WTW survey

Salaried employees are expected to see a larger salary increase in 2023, with companies budgeting for an overall median increase of 10%, according to the Willis Towers Watson Salary Budget Planning Report. This translates to an average salary increase of 9.8% in 2023, compared to the actual increase of 9.5% paid in 2022.

Concerns about tight labor markets and inflation
influenced the higher projected salary budget, the report reveals.

The financial services, banking and technology, media and gaming sectors are expected to see the highest salary increases, at 10.4%, 10.2% and 10% respectively.

58% of Indian employers forecast a higher salary increase this year compared to last year, while 24.4% made no changes to the budget. Only 5.4% cut the budget compared to 2022.

Rajul Mathur, Consulting Leader India, Work and Rewards, WTW said in a statement: “In 2022, actual salary increases exceeded budgets and this was largely due to better than expected business performance and the need to retain talent. Despite economic headwinds, higher projections for 2023 reflect cautious business optimism and a still tight labor market.”

Overall, the most cited reasons why organizations reported higher actual salary budgets for 2022 compared to projections made last year were concerns about a tighter labor market (68.3%), employee expectations/concerns (44.7%) and anticipation of stronger financial results – actual or expected (26.4%).

Projected and actual (median) salary increase for companies in India:

Source: WTW Salary Budget Planning Report

About 42% of companies in India also forecast a positive revenue outlook for the next 12 months, while only 7.2% forecast a negative outlook.

At 10%, salary increases in India continue to be the highest in the APAC region. China is expected to see a 6% increase, with Hong Kong at 4.0% and Singapore at 4% next year. Voluntary attrition rates in India continue to be among the highest in the region at 15.1%, second only to Hong Kong.

This report summarizes the findings of WTW’s bi-annual wage development survey and was conducted in April and May 2022. Approximately 22,570 sets of responses were received from companies in 168 countries around the world. The survey has 590 Indian participants.