India is likely to top salary hikes in Asia for a fifth year in 2008, but the Indian companies are finding it hard to retain talent, a new survey said Tuesday.
Indian salaries are expected to rise by an average 15.2 percent in 2008 after rising 15.1 percent last year, according to an annual survey conducted by global human resource company Hewitt Associates. Real estate and energy companies were seen offering the biggest hikes of 25 percent and 17.5 percent respectively.
China is expected to come in second with projected raises of about 8.5 percent, followed by the Philippines with 8.3 percent, the survey said.
However, the high salary growth is fueled by a talent demand and supply mismatch, it said.
"Employees are increasingly looking for great career opportunities and are actively being pursued by other organizations," said Sandeep Choudhury, a Hewitt executive. "Organizations are using compensation as a strategic lever."
But the salary increases in India were expected to stabilize in the 9-10 percent range by 2012, Hewitt Associates said.
The survey measured actual and projected increases in salaries of individuals in the private sector. It examined compensation practices in five specific job categories -- executives, managers, midlevel staff, clerks and manual workers.
The survey covered 2,000 Asian companies, 540 of which are in India. The survey did not provide a margin of error.
The companies surveyed in India included foreign-owned, locally owned and joint venture companies across 19 industries.
The survey also showed that the traditional gap between salary hikes offered by locally owned and multinational companies had closed with Indian private sector companies projected to raise salaries by 15.5 percent in 2008 compared with 14.9 percent offered by multinationals, the survey added.
India's booming economy has averaged nearly 8.5 percent growth in the past five years, but more than 300 million of its nearly 1.1 billion people still live on less than a dollar a day and nearly twice that number struggle for access to basic facilities such as drinking water, education and health care.
Junior managers and midlevel staff received the biggest pay hikes in 2007, a trend likely to continue in 2008, the survey said.
The survey included companies in Australia, China, Hong Kong, India, Japan, South Korea, Malaysia, the Philippines, Singapore, Taiwan, and Thailand.