Downturn effect: Double-digit salary hikes a thing of past!

Source: TheEconomicTimes
India Inc may have been spiralling salaries in the recent years but not anymore, as double-digit pay hikes can well be a "thing of the past", thanks to the financial crunch forcing corporates to embark on cost cutting spree.

According to Global HR services firm Manpower, companies have become cautious about increases in salaries and are seeking new ways to answer the downturn which include handling the talent in a more efficient manner.

"High double-digit salary hikes are a thing of the past. India Inc will have a cautious approach towards salary increases in FY'10. Even if a company performs extraordinarily better, it will still be conservative with any pay hikes," Manpower India Managing Director Naresh Malhan told media.

Malhan added that the companies are under the cash conservation syndrome following the economic downturn, which would discourage them from going for significant rise in salaries this year.

Industry experts believe that companies are looking for innovative ways to handle their talent rather than just layoffs which include multi-skills training and consciously looking at filling up gaps in the organisation.

"Manpower also provides over 4,300 courses on training and development courses for candidates, which will help in enhancing their skills across various levels," Malhan added.

Malhan added that salary hikes, which have been doled out by Indian companies in the past few years, can only be seen again if the similar aggressive economic growth can be reachieved.

Meanwhile, Hewitt Associates in its annual salary increase survey has revealed that Indian companies are projected to witness an average salary hike of 8.2 per cent in 2009, the highest in the Asia-Pacific region.

Experts stated that the estimated single digit rise in salaries for this year is significantly less than the over 13 per cent hike seen in 2008.

Further, HR service providers business may be hit due to the slowdown in recruitments in the wake of the economic downturn but they stand to gain through their consultancies. HR consultancies are busy brewing up innovative ways for companies to tackle the downturn.