White collar workers demand fat hikes to switch jobs

Shilpa Majithia (name changed on request), a banking professional, recently got an offer from one of the leading private sector banks in India. However, the mid-level professional declined the offer, as the 20-22% hike offered by the bank was not congruent with her expectations.

Majithia felt that with inflation zooming at 8.23% and food inflation hovering in double-digit numbers, her move to another bank would be justified only if she could get a hike of at least 35% over her existing salary.

With a seven-year work experience and an MBA from a reputed institute to boot, she believes her expectations are reasonable.

“Nowadays prices of almost everything has touched the roof. In such a scenario, I feel that it would not be apt to quit for a 20% hike, which my current organisation will give me soon,” said Majithia.

When it comes to moving to a new organisation, like Majithia, several professionals have begun to demand steep hikes, with factors like high inflation and demand for talent coming to their aid.

The huge shortage of skilled employees will continue to keep wage inflation at high levels even if the wholesale price index (WPI) inflation falls, said Sachchidanand Shukla, chief economist at Enam Securities.

Neeraj Swaroop, regional CEO, India & South Asia, Standard Chartered Bank, said that there is pressure on the wage line because of competition for talent and growth. “We have seen salary rises which are higher than earlier,” he noted.

According to Sunil Goel, director, GlobalHunt India, an executive search firm, while two years ago, on an average, people demanded 15-20% hike over their existing salaries, now the expected hike was 30-35%.


“Unlike some years ago, when people changed jobs at regular intervals, today there is a tendency to stick longer with the existing company. So, when you have three to four years experience with one company, you go out and command a better hike. More the time spent in an organisation, higher the hike that is commanded when joining a new company,” said Goel.

Human resources experts say that the gap between the demand and supply for talent is widening. “People may have good academic credentials, but often they don’t have the kind of skills that we look for,” said Rohan Dalal, managing director, Mindcrest, a legal process outsourcing (LPO) firm.

As there is a high demand for skilled people, companies are compelled to pay well to attract the best talent, said Raman Roy, CMD, Quatrro BPO.

“During the recession, the demand was muted.” Dalal said of the approximately 5,000 resumes Mindcrest gets annually, they select only 6-8% as most don’t have the required skills. “Thus competition for talent increases and inflation-related adjustments to salaries are being seen,” said Dalal.

Moreover, employees aren’t looking at simply changing jobs and companies aren’t merely looking at hiring people, say experts. “Employers want the brightest brains while employees want the biggest bucks and this is also giving rise to this tendency of demanding fat hikes,” said Goel.

Do you really agree with this article people.....where employees are asking for 35%-40% hike in salary? Is this kind of expectation justified.