In the face of considerable global uncertainty, the Indian ITeS industry can be described as truly resilient. The sector projects an average increase of 10.1 percent for 2013. BFSI captives and other captives are projecting salary increase at 10.2 percent. Third party service providers on account of tough global economic conditions, depreciating rupee and huge cost pressures on the other hand posted an average salary increase of 8.9 percent. Organizations are looking at various ways to rationalize wage costs and improve utilization and productivity, with a view to sustain desired business performance.

Sandeep Chaudhary added, “Wage inflation will be a high pressure point for sectors where wage cost is a significant part of operating expenses and revenues. Sectors where wage cost is relatively a small ticket item, the minimum fair pay increase will remain strong”.

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Other Trends from the Study

A majority of organizations (93 percent) made a bonus payout in 2012. However, organizations reported reduction in quantum of variable pay awards. This is one of the strategies being adopted to contain costs and ensure a tighter alignment to performance. While companies have not reverted to reducing coverage and eligibility of employees receiving variable pay awards, they are definitely re-examining the measures and metrics used to assess performance, ensuring strong linkage between individual performance and payout.

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