Byline: Malini Goyal

NEW DELHI: Economic indicators are coming in, thick and fast. Indian consumers have been pinched by rising interest rates, untamed inflation, consumer credit squeeze and tightening tax noose - from FBT on ESOPs to expanding service tax net.

But fortunately,

the news from the job market for Indian workers is bright and cheery. Pay packets are getting fatter - faster, too. Multiplying job offers are keeping Indian workers in good humour. And the nightmare for India Inc continues amid robust growth with ever-more demanding employees.

Just how good and bad is this year going to be for the job-seekers and the job-givers? How are companies restructuring pay packets to make them more performance-oriented. Between November 2006 and March 2007, Watson Wyatt, a global HR consultancy firm, undertook an in-depth study reaching out to some 100 companies, vetting over 2,50,000 payrolls in more than 20 top cities across the country to make sense of the trends and future outlook for salaries, attrition and top employee drivers in the job market.

"This is the first time we are doing such a consolidated study of so many sectors," says Anita Belani, country head, Watson Wyatt. The sectors included are IT and ITeS, oil and gas, BFSI, manufacturing and pharma. Here's a snapshot of the way the job market is stacked up and the direction it is headed in the near future:

Salary Hikes:

The fat salary hikes - Indian workers have got the fattest salary hikes over the past five years, according to various studies - will continue. With retailing and many more new emerging sectors joining the war for talent, salary will only go northward.

Attrition Pain:

Job-hoppers gain momentum as new emerging and fast-growing sectors like retail, airlines hire workers in big numbers. Across all levels, the median attrition rate is 16.5%, but clearly companies are managing the top executives well.

Customer services representatives, looked at as separate category due to its demand from a variety of sectors, registered a peak attrition rate of 40.5% in a few segments. Out of the companies surveyed, 16% reported difficulties in retaining the top performers. As a result, as high as 68% of them have reward strategy to reward superior performance.

A*Attrition rate*: Median

A*Across all levels: 16.5%

A*Senior management: 5%

A*Middle management: 10%

A*Junior management: 20%

A*Top performers: 3%

Hiring Tools:

Companies are using a combination of monetary and non-monetary benefits to lure executives. Understandably, providing career growth opportunities with the company gets the top rank with close to 70% of the companies using it to retain and attract employees. Differentiating employees on the basis of performance is becoming the norm and critical for companies as salaries rise.

A*Career growth opportunities: 70%

A*Variable pay: 54%

A*Advance training: 46%

A*Stock options: 22%

A*Flexible work schedules: 20%

Companies are also using a range of methods to reward top performers. They include faster-track career growth (62%), recognition rewards (54%), salary hikes (50%), bonuses (46%), advanced training opportunities (38%) and overseas projects (24%).

Reasons for Leaving:

As one moves up the hierarchy, money is not the biggest driver for switching jobs. Maybe, it becomes the hygiene factor as other factors become more important. Surprisingly, dissatisfaction at workplace is not such a big driver for job change.

Top Middle Junior

Better Career opportunities: 24% 54% 46%

Better pay packets 16% 58% 60%

Unhappy at work 4% 12% 18%