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Salaries to rise above inflation level in next 5 yrs: Study

Education NewsAccording 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 percent of the respondents from small organisations and 54 percent from large organisations believe this wage inequality would increase over the next five years. At the sectoral level, 70 percent of companies across financial services segment, 68 percent from professional services, 62 percent from consumer discretionary segment, 54 percent from manufacturing and 36 percent 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 organizations 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,” Towers Watson India Managing Director Vivek Nath said.

Recognizing 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 percent of companies surveyed believe that the rising share of workforce costs would be a major challenge that can impede growth, while 53 percent have identified inadequate supply of skilled workforce as a major impediment. Around 39 percent of respondents mark slow labor reforms while 46 percent 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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