How Can I Justify a 16% Salary Raise for Our Corporate Team in 2009? Seeking Your Input!

All,

Our company's salary increase period is from January to December. I am preparing the salary proposal for 2009 and planning to suggest a 16% raise to the corporate team. I request all of you to forward the 2008 salary survey report, which will assist me in obtaining approval more easily.

Thank you,
Nalini

In this period of global recession, on what basis are you proposing to the Management a 16% increase in wages? There has been a turnaround in the wages this year, and in my opinion, it would be very restrictive to go no higher than 13%, especially for the top performers. The profit margins of the company are being impacted, and with the industry experiencing a slowdown, instead of resorting to measures like downsizing and reducing costs through manpower, it would be better to give employees a lesser hike this year. It is important to help them understand the reasons behind this decision.

By the way, which sector are you from?

Nalini,

If your staff members have not been properly appraised last year, ensure that they are given a good hike to compensate for the market situation and the economy. I have seen companies where the salary increments were very low last year, and employees, hoping for a better hike, continued to stay until this year.

If the hike this year is again only 5-10%, citing the economic crisis as the reason, then the employees will feel cheated for the past two years, and they may choose to leave with heavy hearts.

Now, with the market situation being challenging, employees cannot easily seek better opportunities. It's unfortunate... a HR manager must strive to do justice for them. Take actions to retain them because finding replacements willing to work for a lower salary than what they were previously earning will be difficult.

Regards,
Chandru
Manager-HR

Salary increments are proposed based on the salary survey data conducted by consultants (you hire for this study) such as E&Y, Hewitt, Mercer, Hay, etc. You need to conduct the survey by choosing competitors in the same field/industry of business and not benchmark with all industries. Either ask the consultant to conduct a database survey (one-year records) for off-the-shelf data available with these consultants or collect fresh data from at least 10 competitors. Once the data is presented, you as HR will need to analyze it thoroughly and fragment it. Only then will you be able to propose the increment percentage; otherwise, it's a baseless exercise. Conduct this survey for a one-time, and the following year, you can age the data internally through a Subject Matter Expert (SME).

Malvina Ashok

Hi Guys,

Can anyone help me with the latest salary hikes projected for 2009 in the engineering sector at Bangalore?