Salaries are expected to rise above inflation level in next five years, but a major chunk of this increase will be cornered by senior ranked and not much would be disbursed to those at mid or junior levels. According to the findings of Towers Watson-CII Industry Opinions Study, the number of jobs is expected to increase in the next five years and the wage gap between the highest and lowest earners across industries is also likely to widen.
Around 60 % of the respondents from small organisations and 54 % from large organisations believe this wage inequality would increase over the next five years.
At the sectoral level, 70 % of companies across financial services segment, 68 % from professional services, 62 % from consumer discretionary segment, 54% from manufacturing and 36 % from energy and utilities believe the wage gap will increase.
On a positive note, a majority of respondents expect the number of jobs generated in their industry to increase in 5 years.
Most of the job creation would be at the junior levels with the most promising sectors being capital goods and transportation.
The report said while on one hand, corporates in India are upbeat about the growth prospects in economy, availability and access to quality talent continues to be a serious impediment that organisations are facing.
While attraction and retention of quality talent continues to remain a challenge, the future envisages a tougher business ecosystem in light of rising wage costs, potentially an inadequate supply of skilled talent and workforce productivity.
– Vivek Nath, Managing Director, Towers Watson India
Recognising the importance of talent as a critical asset for steering the next wave of growth, firms have indicated that there are four key factors related to skills and talent which can potentially hinder growth over next five years.
Around 42 % of companies surveyed believe that the rising share of workforce costs would be a major challenge that can impede growth, while 53 % have identified inadequate supply of skilled workforce as a major impediment. Around 39 % of respondents mark slow labour reforms while 46 per cent believe that stagnating workforce productivity poses serious threats to industrial performance.
“Sentiment has turned positive on the back of pro-reforms approach of the government,” said CII Director General Chandrajit Banerjee, adding that “addressing issues related to workforce would indeed be crucial for driving the next wave of growth”.
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