1/4th of India Inc reports flat or drop in real wages

MUMBAI: Almost one-fourth of the companies surveyed in India have opined that real wages to their managerial-level employees have either been flat or declined over the last five years, a study has said.

The clerical, administrative and employees, who are compensated on an hourly basis, have actually been hit harder with over 25 per cent of the firms surveyed reporting that real wages had either been flat or declined, said Towers Watson's Global Talent Management and Rewards Study 2010.

However, the incidence of real wage decline or stagnation for managerial-level employees over the past five- years for Japanese, US and Chinese companies is higher at 71 per cent, 59 per cent and 47 per cent, respectively, it said.

This interesting revelation is in stark contradiction to the acknowledged fact, which the survey also endorses, that economic growth continues to drive increases in the real value of rewards in Asia, including India.

"While India has an impressive growth rate which is second only to China, the reason for the real wages being flat or declined is the high inflation rate that the Indian economy has been grappling with," the study said.

It also stated that the drop or the flattening in real value of wages to the managerial staff in almost one-fourth of the companies surveyed is "disturbing" since a majority of the firms surveyed believe they offered opportunities to earn significantly higher levels of compensation to their professional/managerial cadre.