Six months into the new financial year, the warm glow of a positive job market is being felt across company hierarchies. Pay packets have gone up in new jobs, while sign on bonuses and guaranteed stock options have made a comeback.
Senior executives are increasingly agreeing to have a higher variable pay attached to sector performances, which reflects a confidence in the months to come.
A 25% to 30% pay increase for senior management is already a reality in the infrastructure and e-commerce space, while last year, there were barely any openings here, says Atul Vohra, managing partner of search firm Transearch India.
The September-to-mid-December period is usually the brightest in the hiring calendar, but Vohra adds hiring intensity will keep increasing.
“In the next five to six months, we expect an unprecedented spin in salaries with government policy boosting industries,” he says. It is precisely this confidence in greenfield industries, infrastructure and real estate that has seen senior executives agreeing to higher variable packages attached to markets.
Srinivas Nanduri, partner board and leadership hiring, Maxima Global Executive Search placed a COO in a real estate company for a mere 5% increase in fixed component but a 40% jump in variable.
“More want to take up challenging roles and salaries linked to the industry’s performance than before,” says Nanduri. Going further, things will only get better, say others.
“Senior executives should hold on instead of taking the plunge. At the most they can get a 20% to 25% increase, similar to last year, but 2015 may be better,” says Arun Shankar Das Mahapatra, chairman and partner, India initiative for search firm Heidrick & Struggles.
Mahapatra has placed 15 CEOs last year and around six till date. In the 2010-2011 market revival, he explains, the top brass could command a 50% salary increase in some cases but those days are gone.
However, with a nudge from the new government, infrastructure projects will open up and demand for top roles will increase, he adds. Recruiters say companies in their pre-IPO stage or in the ecommerce sector are attracting talent with long-term incentive plans.
The short-term increase in a senior executive’s salary may show a 20%-25% jump but those entering e-commerce and about-to-be-listed firms will see a 100% increase in their long-term payout, says Navnit Singh, chairman and regional managing director India for KornFerry International.
A senior executive of a Mumbai-based search firm says he recruited the chief technology officer of an e-commerce company for $1 million. The candidate is of Indian origin, worked in a global e-commerce company and will return to India for his new role, adds the recruiter, who does not wish to be named.For those in the middle and lower rungs, job options have shot up by at least 10%, according to ABC Consultants.
Increase in counter offers and the rise in number of job postings show companies are increasing their intake. A 40% increase is now a possibility for those earning between Rs 10 lakh and Rs 40 lakh, says Kamal Karanth, MD of Kelly Services.
An average of 30% raise is already being seen in the FMCG, retail and pharmaceutical sectors. With the market looking up, companies are creating retention hooks and exit barriers for employees.
Consequently, long-term incentives and better benefits are being re-evaluated, according to consulting firm Aon Hewitt. “The middle management can expect at least a 15%-20% increase in salaries while making the shift whereas last year, it was a mere 1%-12%,” says Ajit Isaac, chairman and MD of Ikya Human Capital Solutions, which looks at middle order hiring. With new projects being launched across sectors, the demand supply gap has gone up, and companies need middle managers to manage ventures.
Employees in this segment typically come with 8 to 15 years of work experience across industries. Staffing firms, which provide contract employees to companies, have seen demand for more candidates, although salary levels of 20% increase are similar to last year.
“The number of contract workers has increased by 10% for each client, but salary increase when changing jobs at the lower rung is 15%-30%, compared with 10% to 20% in the same period last year,” says Aditya Narayan Mishra, president – staffing, Randstad India.