Fin services will beat tech with the best salary hikes in 2023, says report

• India continues to top the list of countries with highest increments, says a WTW report.
• The WTW report quotes that over 68% of the companies cited tight labour markets as the foremost reason for giving a higher increment.
• More than half of Indian companies are increasing their salary budgets from last year given tight labour market conditions.

In the next increment cycle, Indian employees can expect a salary hike of at least 10%, which is highest in the APAC region, says a Salary Budget Planning report by Willis Towers Watson (WTW).

India continues to top the list of countries with high increments. China is projected to see an increase of 6%, followed by Hong Kong and Singapore at 4% in 2023.

The report quotes that over 68% of the companies cited tight labour markets as the foremost reason for giving a higher increment. And, 44% are concerned about employee satisfaction as the voluntary attrition rate is the second highest in India among APAC countries.

As many as 42% of companies cited strong revenue generation projection in the next 12 months as the reason. The survey is based on 22,570 sets of responses from companies across 168 countries.

For this, more than half of the Indian companies are increasing their salary budgets from last year given the tight labour market conditions.

“2022 saw actual salary increments being higher than budgets and this was largely due to better-than-expected business performance and the need to retain talent. Despite the economic headwinds, higher projections for 2023 reflect cautious business optimism and a continued tight labour market,” said Rajul Mathur, consulting leader of India for work and rewards at WTW.
Sectors with the highest salary hikes
The report further projects that financial services employees will get the maximum salary increment with at least 10.4%; followed by employees in banking, technology media and gaming with 10.2% and 10%.

Sector	Salary hike projection
Financial services	10.4%
Banking	10.2%
Tech media and gaming	10%
General Industry	10%
Manufacturing durable goods	10%

“We saw significant salary increases across sectors in 2022 and a similar trajectory is expected in 2023. With increased focus on technology enabled growth, the demand for digital skills is driving pay increases for tech talent, especially in the technology, media and gaming, banking and financial services sectors,” added Mathur.

Better than expected business performance has also resulted in higher variable payouts in 2022 across career bands. Companies are allocating more variable pay budgets to above average and top performers.

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