This year's average salary hike is expected to be around 11.2 per cent. This is lower compared to last year's average hike of 12.4 per cent, said HR consulting firm Ma Foi Randstad.
Based on a survey of 400 companies, the study has predicted a salary hike range of 10.1 per cent to 12.6 per cent.
Many companies are considering a double-digit increase primarily because of double-digit inflation that prevailed last year.
But variable pay realised by employees was observed to be in the range of 70-85 per cent of the targeted variable compensation. Organisations, hard-pressed for overall profitability and margins, paid out lesser variable pay, the study said.
Knowledge intensive sectors, known for offering hefty average increases earlier, have slowed down.
Mr E. Balaji, MD and CEO, Ma Foi Randstad, said organisations are cautious in hiring and expansion also. “With the slow economic growth and inflation business sentiments have not been very robust. Inflationary pressures in other markets such as the EU and the US have also affected the economy adversely.”