MUMBAI: Employees at Indian telcos, now grabbing headlines for rising competition and falling profits, may find some cheer next year with compensation expert Aon Hewitt estimating better 2018 increments than this year’s record low increases. On an average, employees at mobile phone operators would get a pay-raise of 8.4%, compared with 7.5% in 2017, the driver being talent retention in a financially troubled industry.
Aon Hewitt also said top performers would get 1.8 times the average raise. “Among the mobile-service providers, while some have done well on parameters such as revenue market share, others are projecting increases on account of the talent flux they are internally facing because of integration,” said Anandorup Ghose, partner at Aon Hewitt India.
The data was part of the company’s India Salary Increase Survey (Phase 1). Also, telecom talent is more mobile in that it can move across different industries. So, compensation growth must factor in the industries to which talent may move, added Ghose. Airtel, Idea Cellular, Vodafone India, and Reliance Jio Infocomm did not respond to ET’s e-mails on the 2018 compensation outlook.
HR experts say high performers would typically belong to teams that look into new-age digital businesses — mobile banking, health and education; data marketing, analysis of customer strategy and market segmentation. Indian service-providers have had a rough year warring on price points, and competition has hurt revenue and profitability, forcing rapid consolidation. Vodafone India and Idea Cellular, the second and third on the leader-board, are awaiting clearances for their merger.
In the past one year, right-sizing has shrunk the employee base in the sector where staff costs make up less than 5% of revenue. The anticipated raise in 2018 is in line with Hewitt’s projections for India Inc, which after an eightyear low of 2017 may raise wages 9.6% on an average. In 2017, the average increase was 9.4%. The telecom industry had seen raises of even 17% a decade ago. “After (merger) approvals, telecom operators could roll out a 10-13% raise for employees to retain them instead of an average of 8-9% that was paid across hierarchy,” said A Ramachandran, partner at search firm of EMA Partners.
Ramachandran added that 2018 may see retention bonuses for the management and key talent that are needed to chart out the structure of merged entities. Bharat Bhargava, partner, telecom advisory services at EY, said profiles would determine compensation.
“Increments will depend on the kind of profile. The consolidation process is still on for companies, and they will want to keep their top management and top people close to them. Those in niche businesses may be affected by the fact that their skill sets are suited to the sector which, on the whole, is not growing,” said Bhargava.
Therefore, those with skill sets developed for only telecom may be in a tough spot since their demand in the job market would be limited. “There is consolidation. While it is driving organisations to trim the workforce, a lot of the people are leaving voluntarily. These are healthy increments that are being projected, especially for talent one wants to hold on to,” said Vikram Chhachhi, principal, global consumer markets, Heidrick & Struggles.
However, not all HR experts are optimistic. Kris Lakshmikanth, chairman of search firm Headhunters India, said the proposed alliances have not yet become operational, and that increases may be very low, with companies continuing cost-reduction initiatives.