New Delhi: Employees in the real estate industry never had it this good. They took home the highest raises in 2007, leaving behind their counterparts in the information technology and ITES sector. As salaries continue to show double-digit growth in India, employees received an average hike of 15.1% in 2007 compared to 14.4% in 2006 according to the 12th annual Salary Increase Survey conducted by Hewitt Associates, a global human resources services firm. In 2008, average salaries are expected to go up by 15.2%.
Junior managers continue to see highest salary hikes with 15.9% increase in 2007 compared to colleagues in top and senior management roles whose pay went up by 13.9% and 14.9% respectively. Middle-level managers have seen significant salary hikes (15.7% in 2007) because of talent crunch in managerial and technical jobs, according to the survey.
The study also reveals that India faces a higher shortage of specialist and technical skills. Commenting on the survey findings, Sandeep Chaudhary, leader of Hewitt's Rewards Consulting practice in India, says, 'As war for talent intensifies, employees are actively being pursued by other organizations offering extremely attractive opportunities and packages.' 'Hence, firms are using compensation as a strategic lever in attracting, retaining and motivating talent,' he adds.
Executives in the information technology and ITES sector took home average salary increase of 15.4% and 14.1% respectively in 2007 in comparison to real estate professionals, whose pay slips saw increase of 25.2%. In 2008, IT and ITES professionals can expect a raise of 14.6% and 14% against 25% hike of real estate employees.
Omaxe chief executive officer, corporate strategy and finance, Arvind Parakh says the sudden requirement of people across roles such as developers, architects, strategy and urban planners, civil engineers, contractors among others resulting from explosive growth in real estate has led to talent shortage.
'The advent of multinationals and organized players in the infrastructure space has also pushed up salary levels, says Parakh. 'Also, real estate companies can afford to pay higher salaries to acquire talent in comparison to IT, ITES companies since the margins are better in the real estate industry,' adds Parakh.
Explaining the consolidation in salary hike in the IT, ITES sector, Chaudhary says, 'Salary increases in the technology and outsourcing sectors, which are still amongst the highest in Asia Pacific have been stabilizing between 13% and 15% since 2004.'
'This is primarily because the salary levels in these two industries are already fairly competitive,' adds Chaudhary. Ma Foi Management Consultants COO E. Balaji says factors including narrowing margins, appreciating rupee and in-house talent development have led to some amount of consolidation in IT and ITES salaries.
Curiously, the projected hikes for 2008 show slight decrease compared to 2007. While employees in top management roles are expected to get raise of 13.6%, the paychecks of middle-level and junior executives are expected to go up by 15.2% and 15.5% respectively. Hewitt forecasts stabilization of salary increases to a range of 9% to 10% by 2012. The study cites reduction in skill gaps, changes in talent acquisition model, re-engineering talent and increased focus on training as factors determining consolidation of salary hikes.
The 2007-08 survey, which measures actual and projected salary increases and compensation practices for various employee levels, is based on response from around 600 foreign-owned, locally owned, and joint-venture companies across 19 primary industries and 22 sub-industries.
