Recently there has been a fair degree of interest over how “the math” for 10% salary hikes in India appears “wrong”. I wanted to thank everyone who has written or discussed the subject, because we keep hearing similar arguments from companies and the media but never had the argument structured into a note that we could discuss.
A caveat before we start: my perspectives are representative only of my experience at Aon over the past decade and a half. There are a lot of surveys that project salary increases and I have no way of representing their perspectives or experiences. Also, Aon has the unique advantage of being the only firm that actually collates data from more than a thousand organisations in India, which is the minimum representative number for an effective representation of market realities.