E-commerce firms to hand out around 12.4% increment this year: Report

MUMBAI|NEW DELHI: Ecommerce companies are expected to hand out the best pay raises to their employees this year in India, with average salary increase of 12.4% with top performers getting more than double of that, says a survey by multinational HR consultancy Aon Hewitt.

The average raise across sectors is expected to be a “cautious” 10.6% this year with infrastructure, life sciences and media following e-commerce in the increment hike charts, according to Aon Hewitt’s Annual Salary Increase Survey in India that covered 580 companies in the country.

“The salary increase is higher in ecommerce than other industries. We saw exactly same in telecom in 2005. You will see excess optimism or froth for a period of time but after a while things will stabilise,” said Anandorup Ghose, rewards consulting practice leader at Aon Hewitt India.
Salary increase is happening in established and matured ecommerce players, he said.

Top performers in ecommerce firms will get an increment of 2.3 times more than their colleagues who have 'met expectations', while the best performers in other industries will see a raise of 1.6 times more than their average counterparts, said the survey.

With changing sentiments, employee expectations have also gone up manifold. The increment expected by the average employee of ecommerce sector is 26% more than what he got last year.

Mobile payments and ecommerce platform Paytm plans to give 30% raise for its best set of hands this year. Those who have 'met' their work expectations will get a 15%-20% raise compared to 13%-15% rolled out last year.

“We need to retain the best because there are many who want to join ecommerce from other sectors but very few who have the skills that we need. We have to train them and therefore cannot lose (to competition),” said Amit Sinha, VP, people and business for Paytm.

Online retailers also use ESOPs and a high component of variable pay to retain their top performers and senior employees. Ashu Malhotra, vice president and chief human resources officer (CHRO) at Jabong, said, “We are at the forefront in terms of taking care of our talent and will offer better than the competitive rates. Salary is one of the most important drivers in terms of attracting and retaining talent.”

KPMG India partner Ashvin Vellody, who tracks ecommerce, said the spurt in salary increments is because firms in the industry will scale up further whether they are in B2B or B2C section. Those in marketing, customer experience and technology will be in demand and need to hire large and retain them will get competitive, he said.

Expecting a positive performance and increase in market competitiveness are the main reasons why 83% of the companies surveyed said they will review their salary budgets for the year.

Services industries like retail, financial institutions, and hospitality represented the lower end of salary increase projections.

In a report on increments, published by ET in January, Hay Group India had said the difference in pay raises between average and top performers is getting sharp. Average performers will be given hikes of 8-10% whereas top performers would be in the 15-18% bracket, depending on the sector.

And the improved sentiments in job market will bring in attrition as well. The study showed that although overall attrition rate at 18.1% is similar to last year, key talent movement has shot up by 31%.