There will only be a marginal rise in salaries for Indian professionals, according to a study by global professional services firm Aon. The study, which analysed data from over 1,000 companies across more than 20 industries, found that the projection of average pay increase this year is 9.7% from last year’s 9.5%.

Speaking exclusively to Fortune India, Anandorup  Ghose, partner and head, emerging markets at Aon India, said, “While it is an improvement over the previous year, I don’t think it is reflective of a strong, positive sentiment, it is only marginally better than what it was, but not the best possible outcome that employees might be expecting this year.”

The company said salary increases in India have been stable over the last three years, reflecting the coming of age of India’s corporates when it comes to managing compensation budgets. The survey also noted that India Inc. continues to maintain a high performance culture, where top performers get almost double raise when compared to that an average performer gets.

“The pay differentiation concept is interesting. It is going to become even more distinct over a period of time,” Ghose said.

The study also found that while there is an improvement in the overall increment projection, budgets for pay hikes across sectors are increasingly moving towards the overall average.

“Sectors projecting a double-digit increment have come down over the years with only five sectors projecting a double-digit increment for 2019. These include sectors such as consumer Internet companies, professional services, life sciences, automotive and consumer products,” the company said in a statement.

The report added that increased government focus on infrastructure resulted in sectors such as cement, metal, engineering services witnessing a revival in demand and an improvement in increment projections for 2019.

On the attrition front, the study found that the attrition rate declined from 18.5% in 2013 to 15.8% in 2018.

However, there has been a rise in involuntary attrition especially at the entry level. The survey notes that a deep dive into the reasons for increase in involuntary attrition highlights cost rationalisation as well as rising automation in certain kinds of jobs especially in the IT and the manufacturing sectors.

Ghose also makes some recommendations to companies that they need to consider while drawing compensation plans and increments. He said that inflation and cost of living increase every year regardless of how inflation is defined, and it impacts junior management the most.

“When you are looking at a number like 9.5%-9.7%, from a junior management perspective, that number needs to be adjusted to ensure they get a real wage increase, and not just a number that is pegged to the 3% consumer price inflation (CPI),” he said.

He also said that there has been a lot of talk about incentives and variable pay becoming a prominent part of the compensation, but in reality figures don’t support that. If companies want to manage costs, the focus on incentive needs to become much more, he added.

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