India might see double-digit salary increase in 2023 amid fears of global recession: Study

Indian firms would likely increase employee compensation by 10.4 per centin 2023, which would be virtually in line with the 10.6 per centincrease seen so far in 2022, as reported by Reuters.

The likelihood of a double-digit pay hike comes as the south Asian nation struggles with skyrocketing inflation amid concerns of a recession in the global economy. In August, India's inflation increased to 7 per cent, continuing an eight-month streak in which it exceeded the central bank's tolerance target.

In a statement based on a poll, Roopank Chaudhary, partner, of human capital solutions at Aon in India, said that the compensation boost reflects "the confidence that corporate India has in its strong business performance."

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Data from 1,300 businesses in more than 40 categories were analysed for the survey.

The impact of increased costs and salary pressures must be balanced, Chaudhary added, with the relatively high rate of turnover and the continuous need for vital talent.

The study revealed that staff departures were still high in the first half of this year (20.3 per cent), but slightly lower than the 21 per centin 2021.

With a forecasted pay growth of 12.8 per cent, e-commerce tops all other sectors, followed by start-ups, hi-tech/information technology and IT-enabled services, 11.3 per cent, and financial institutions, 10.7 per cent.

(with inputs from agencies)