According to the 'Total Remuneration Survey' conducted by Mercer in March, it was forecasted that the average salary increase in the corporate world in India will be 12% in 2013.
Here are some trends that we see in Indian companies in recent times and this will help you decide on your career path, salary negotiation and how to optimize your salary-
- Companies are generally increasing the variable pay component of the salary, more so at higher management levels. Variable pay is linked to the performance of the individual as well as of the company. Moreover the maximum variable payout is lesser compared to previous years. So it is a no brainer that one has to work had and smart to ensure that his or her pay is maximised. It would also help to be aligned with profit centres of the organization.
- Though companies are aware that some employees may leave for better pay packages elsewhere, they are retaining similar or lower levels of increment compared to previous years. This indicates that conditions are tough for companies as well as for employees. Sometimes you have to take that tough decision of looking for better prospects elsewhere.
- Freeze on company travel, restricted usage of software packages, usage of shared services and telecommuting (working from home) are some of the measures used by companies to reduce costs. For example when employees telecommute, the company saves on the space allocated to employees as well as transport costs if borne by the company. Participating in the company’s cost cutting initiatives will put you in a positive light and will be beneficial for you as well in the long run.
- On a personal front, you should be able to distinguish between your needs and wants so that your expenses do not exceed your income. It is also important to save some money so that long-term financial goals can be achieved. Basically needs are things that you cannot be avoided like monthly expenses for basic necessities, Home loan EMIs, Insurance expenses, medical expenses etc. Wants are our desires. They consist of lifestyle expenses like branded clothes, vacationing abroad etc. You may not be able to do away with all these expenses but analyzing them carefully will help you to reduce expenditure on them.
Economic conditions are tough all over the world and therefore companies are working on tight budgets and tough margins. Employee cost is one aspect where they look to optimize expenditure. You should be aware of the salary trends and also ensure that your lifestyle does not have unnecessary expenses so that your long-term financial status is not hampered.