2014 to have slowest salary hikes in many years - Chart Of The Day 27 February 2014 - Equitymaster

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2014 to have slowest salary hikes in many years
Feb 27, 2014

Slower economic growth has not only dented corporate profitability but also the earning prospects of employees. As per a survey by consulting firm, Aon Hewitt salary increases in 2014 for private employees are likely to be in the region of 10%. This is expected to be the lowest ever figure in the last 5 years. Roughly 565 companies were surveyed in this exercise. And out of that roughly 69% of the respondents reduced their salary projections in 2014 as compared to those paid out in 2013. Sectors like consumer goods, retail and automobiles are likely to witness a decline in salary levels indicating a slowdown in consumer spending.

Nonetheless, the top performing workers are likely to get higher salary increases than the projected rate of 10%. But on an overall basis, declining salary levels over the last 4 years as seen in today's chart of the day is an area of concern. This indicates the plight of most sectors in the economy. Discretionary consumption is hurt due to higher inflation. On the other hand, manufacturing sector is struggling due to higher interest rates. Unless we see an all round growth in the economy, higher double digit salary increases as witnessed in the last decade may take some more time to attain.

Data Source: Mint

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