'Average pay hike at 6.1% this year; likely to be 7.3% in 2021'

New Delhi: Companies in India doled out an average salary increase of 6.1 per cent this year, the lowest in more than a decade, amid the coronavirus-induced economic slowdown but are expected to give a pay hike of 7.3 per cent in 2021, says a survey.

The survey by leading global professional services firm Aon plc on Wednesday showed organisations in the country have shown tremendous resilience despite the COVID-19 challenges and are betting on recovery. As many as 87 per cent companies plan to give salary increases in 2021 compared to 71 per cent in 2020.

According to the survey, companies in India gave an average pay increase of 6.1 per cent during 2020, the lowest since 2009 when the average was 6.3 per cent. The latest Salary Trends Survey in India also noted that companies in India will give an average pay hike of 7.3 per cent in 2021.

As per the findings based on an analysis of data across 1,050 companies from more than 20 industries, as of September-October 2020, 87 per cent of surveyed companies said they intend to pay out salary increases in 2021 and 61 per cent of these organisations plan to offer increases between 5 per cent and 10 per cent.

In 2020, 71 per cent of companies provided salary increases and of this group, only 45 per cent gave hikes in the range of 5 to 10 per cent.

"This is a special year -- business leaders are putting investments in their employees and clients ahead of shareholder return. Despite the gravity of the COVID-19 pandemic in India and its deep impact on the economy, organisations in India have shown tremendous resilience and a mature view on talent," said Nitin Sethi, a partner at Aon and CEO of the firm's Performance and Rewards Solutions practice in India.