India : Compensation Growth Outlook 2012

1. India : Compensation Growth Outlook 2012

2. Table of Contents 1 About Right Step 2 About India Compensation Growth Outlook 2012 3 Summary Results : India Compensation Growth Outlook 2012 4 Detailed Analysis : India Compensation Growth Outlook 2012 5 Detailed Analysis : Industry Wise Results

3. About Right Step Right Step Consulting (P) Limited offers solutions for Human Capital Management. We help our clients build their businesses by help finding & managing the right talent for them. Combining unparalleled experience, comprehensive capabilities across many industries and business functions we collaborate with clients, work as a trusted advisor to help them make distinctive, lasting, and substantial improvements to their performance. We have in-depth functional and industry expertise. Our scale, scope, and knowledge allow us to address a wide spectrum of industries and challenges. At heart, we are a group of people who are passionate about taking on immense challenges that matter to our Clients. Management Team Right Step Consulting (P) Limited is founded and run by professionals from premier B-Schools, including the IIM. The founding team has extensive recruitment experience at leadership level in global Fortune 500 staffing major, where they have serviced clients across sectors. The team has hands on functional business experience across the various sectors we work in.

4. About : India Compensation Growth Outlook 2012 • First of its kind exhaustive survey by an Indian firm for Indian Industry • Representation from all segments of Indian Economy • Listed Companies (BSE / NSE) • Unlisted / Privately held entities • Large Enterprises • Emerging Enterprises • Subsidiaries of Foreign MNC • Smaller Firms (< 50 employees) • Focused on compensation • Outlook for change in compensation hikes in 2012 as compared to 2011 • Structure of Compensation (Fixed & Variable) • Expected changes in compensation across various management levels • Expected changes in compensation for different performance levels

5. About : India Compensation Growth Outlook 2012 • Carefully selected participation by invitation • 2326 participants • Captures latest outlook from corporate sector • Responses collected in second fortnight of March after union budget’s presentation • Timing enabled respondents to have a better foresight into the next year’s annual operating plan for their company and therefore the approach on compensation • Detailed Coverage & Analysis • Segment wise - MNC & Indian • Segment Wise - Larger Conglomerates to Smaller Emerging Enterprises • Industry wise • Performance Level wise (Best Performer to Weakest Performer) • Managerial Level wise (Top management to Junior levels) • Variable pay components at various managerial levels

6. About : India Compensation Growth Outlook 2012 Sectors Covered Every sector had minimum of 30 participants. Sectors like Gems & Jewellary, Paper & Pulp etc. where participants were fewer, have been clubbed together under “others”.

7. About : India Compensation Growth Outlook 2012 Sector Wise Participant Mix Every sector had minimum of 30 participants. Sectors like Gems & Jewellary, Paper & Pulp etc. where participants were fewer, have been clubbed together under “others”.

8. About : India Compensation Growth Outlook 2012 Sector Wise Participant Mix Every sector had minimum of 30 participants. Sectors like Gems & Jewellary, Paper & Pulp etc. where participants were fewer, have been clubbed together under “others”.

9. About : India Compensation Growth Outlook 2012 Sector Wise Mix of Participants Every sector had minimum of 30 participants. Sectors like Gems & Jewellary, Paper & Pulp etc. where participants were fewer, have been clubbed together under “others”.

10. Summary Results : India Compensation Growth Outlook 2012

11. Outlook 2012 • Marginal drop expected in salary hikes in 2012 as compared to 2011 • From 11.89 % in 2011 to 11.54% in 2012

12. Outlook 2012 • Both Manufacturing and Services expects similar drops in salary hikes 2011 2012 2011 2012 2012 2012

13. Outlook 2012 • Multinational companies expected to have marginally higher drop as compared to Indian companies 2011 2012 2011 2012

14. Outlook 2012 : Industry Wise Prominent sectors where hikes expected to be significantly lower than 2011 • Telecommunication • Heavy Engineering / Machinery • Retail • BFSI • Power & Energy • IT Software • FMCG / FMCD • Infrastructure / Construction • Building Material

15. Outlook 2012 : Industry Wise Prominent sectors where hikes expected to be higher as compared to 2011 • Medical / Healthcare / Hospitals • Automotive • Pharmaceuticals

16. Outlook 2012 : Industry Wise • Sectors where hikes expected to be above the average 11.54% hike for all sectors • Pharmaceuticals • Automotive • Medical / Healthcare / Hospitals • Industrial Products • IT Software • Infrastructure / Construction • Heavy Engineering

17. Outlook 2012 : Industry Wise • Sectors where hikes expected to be below the average 11.54% hike for all sectors : • Mining • Facility Management / HVAC • Retail • Oil & Gas • BFSI • Logistics • Telecom • Textiles / Garments / Apparel • ITeS / BPO / KPO

18. Outlook 2012 : Increase / Decrease • 35% of the participating companies expected to give lower hike in 2012 as compared to 2011 • 35% of the participating companies expected to maintain the same hike as in 2011 • 30% of the participating companies expected to give higher hike in 2012 as compared to 2011

19. Outlook 2012 : Size Wise • Lower salary hikes expected across all segments • Lesser drop expected in Mid Size Organizations • Higher drop expected in Larger organizations, as well as Micro SMEs

20. India Compensation Growth Outlook 2012 : Detailed Analysis

21. Outlook 2012 : at Junior Management Level • Lower salary hikes expected across all levels of performances • Gap between Weakest and Highest Performers expected to reduce

22. Outlook 2012 : at Middle Management Level • Lower salary hikes expected across all levels of performances • Gap between Weakest and Highest Performers expected to reduce

23. Outlook 2012 : at Senior/Top Management Level • Lower salary hikes expected across all levels of performances • Gap between Weakest and Highest Performers expected to reduce

24. India Compensation Growth Outlook 2012 : Detailed Industry Wise Results

25. Automotive

26. Outlook 2012 : Automotive – Overall • Expected Salary hikes in Automotive Sector better than average for all sectors • Expected salary hike in 2012 is 13.05% significantly up as compared to 12.53% in 2011 2011 2012 2011 2012

27. Outlook 2012 : Automotive – Overall • 42% of the companies are expected to give a higher hike as compared to last year • Another 31% of the companies are expected to maintain the same hike as last year • 27% of the companies expected to give a lower hike as compared to last year

28. Outlook 2012 : Automotive – Junior Level • Significantly higher salary hikes for average and above average performers

29. Outlook 2012 : Automotive – Middle Level • Significantly higher salary hikes for average and above average performers

30. Outlook 2012 : Automotive – Senior Level • Significantly higher salary hikes for average and above average performers

31. Automotive : % of Variable Compensation • Variable compensation as % of total cost to company (excluding sales based incentives) • Lower variable compensation at Junior level • Gradual rise in variable pay along with level

32. Animation, Advertising, Media, Entertainment

33. Outlook 2012 : Animation/Advt/Media – Overall • Salary hikes in 2011 at 11% expected to be lower than 12.14% in 2011 • Drop higher than overall industry average 2011 2012 2011 2012

34. Outlook 2012 : Animation/Advt/Media– Overall • 36% of the companies expected to give lower hikes as compared to last year • 29% of the companies are expected to give higher hikes as compared to last year • Remaining 36% of the companies are expected to maintain the same hike as last year

35. Outlook 2012 : Animation/Advt/Media– Junior Level • Lower salary hikes expected across all levels of performances • Gap between Weakest and Highest Performers expected to reduce

36. Outlook 2012 : Animation/Advt/Media– Middle Level • Lower salary hikes expected across all levels of performances • Gap between Weakest and Highest Performers expected to reduce • No change in salary hikes for below average performers

37. Outlook 2012 : Animation/Advt/Media– Senior Level • Lower salary hikes expected across all levels of performances • Gap between Weakest and Highest Performers expected to reduce • Drop expected in salary hikes for below average performers

38. Animation/Advt/Media – % of Variable Compensation • Variable compensation as % of total cost to company (excluding sales based incentives) • Lower variable compensation at Junior level • Gradual rise in variable pay along with level

39. PHARMACEUTICAL

40. Outlook 2012 : Pharmaceutical – Overall • While average salary hike across all sectors is expected to reduce from 11.89% in 2011 to 11.54% in 2012, Pharmaceuticals sector employees can expect an average salary hike in 2012 of 13.21% (up from 12.97% average in 2011) 2011 2012 2011 2012

41. Outlook 2012 : Pharmaceutical – Overall • 33% of the pharmaceutical companies are expected to give a higher hike as compared to 2011 • Another 41% of the pharmaceutical companies are expected to maintain the same hike as 2011 • 26% of the pharmaceutical companies expected to give a lower hike as compared to 2011

42. Outlook 2012 : Pharmaceutical – Junior Level • Lower salary hikes expected for below average performances • Higher salary hikes expected for average and above average performances

43. Outlook 2012 : Pharmaceutical – Middle Level • Lower salary hikes expected for below average performances • Higher salary hikes expected for average and above average performances

44. Outlook 2012 : Pharmaceutical – Senior Level • Lower salary hikes expected for below average performances • Higher salary hikes expected for average and above average performances

45. Pharmaceutical – % of Variable Compensation • Variable compensation as % of total cost to company (excluding sales based incentives) • Lower variable compensation at Junior level • Gradual rise in variable pay along with level

46. Banking, Financial Services & Insurance

47. Outlook 2012 : BFSI – Overall • Salary hikes in BFSI sector expects to drop from average of 11.21% in 2011 to average of 10.53% in 2012 2011 2012 2011 2012

48. Outlook 2012 : BFSI – Overall • 40% of the companies are expected to give a lower hike as compared to 2011 • 38% of the companies are expected to maintain the same hike as 2011 • 23% of the companies expected to give a higher hike as compared to last year

49. Outlook 2012 : BFSI – Junior Level • Lower salary hikes expected for below average performances • Higher salary hikes expected for average and above average performances

50. Outlook 2012 : BFSI – Middle Level • Lower salary hikes expected for below average performances • Higher salary hikes expected for average and above average performances