Indians to experience low salary hikes likely in 2009

Anticipating a decline in its business performance in 2009, India Inc is likely to cut back on the planned salary increase in the coming year, while most firms want to avoid huge job cuts, a latest survey says.

Majority of companies in the country are trying to be selective in planning the workforce, compensation and benefit cuts for 2009, while they anticipate a decline in their company's business performance next year, according to global HR consultancy Mercer.

The survey revealed that as much as 83 per cent of companies expect salary increases in the coming year to be lower than originally planned by them. The responses indicate that the companies are planning to look closely at holding down the level of compensation increases in 2009.

However, only 19 per cent of survey respondents are considering the more drastic step of freezing 2009 salaries at 2008 figures.

The results for companies in India generally match survey findings from other parts of the world. In China, Australia, the United Kingdom and the United States as well between 20 and 30 per cent respondents believe that the 2009 bonus payout would be reduced from those originally planned.

"India grew on the back of her knowledge and people -centric industries such as financial services, information technology and retail, among others. However, primarily due to employee costs having risen in India at double-digit rates since 2003, cost structures have been coming under severe strain," Mercer Consulting (India) country leader Padma Ravichandar said.

Most companies in India plan to avoid significant workforce reductions, but they do not plan significant hiring either, the survey revealed.

Nearly two-thirds (63 per cent) of companies surveyed revealed that a significant reduction in workforce was unlikely even as only one in four firms expect to continue their hiring activities at or above replacement levels.

This current situation should be perceived as a cooling-down period in terms of talent costs. This is a levelling act which may help India remain cost competitive in the long run. In the near term, the adverse impact of business sentiment seems all pervasive, Ravichandar added.

Over 80 per cent of respondents expect their company's business performance to decline in 2009, the Mercer survey noticed.

Further, corporate India expects mergers and acquisitions to be severely affected in the next year, with fewer than seven per cent of survey respondents expecting increased M&A activity.

Mercer's survey, conducted in early November, collected responses from over 100 human resource and finance professionals in India, as part of more than 1,000 responses from around the world.

Source: Agencies

80% of APAC Internet users go online to shop

The internet is proving as appealing a shopping destination as the likes of shopping centres in Tsim Sha Tsui in Hong Kong or Orchard Road in Singapore. According to a Visa e-Commerce Tracking Survey, nearly 80 percent of internet users surveyed in Asia Pacific say they made an online transaction and spent an average of over US$3,000 each in the past 12 months.

The top three draws for shopping online were being able to shop at any time (88 percent), at the best prices (83 percent), and being able to shop easily (82 percent). According to the respondents, their most commonly made online purchases were digital entertainment (59 percent), travel (51 percent) and fashion (49 percent).

Among the wide range of products and services available on the internet, Asia Pacific online shoppers surveyed reported that they spent the most on travel services with an average spending of $812 in the last 12 months. Travel items included airline and rail tickets, hotel accommodation and travel packages.

Mohamad Hafidz, regional head, e-Commerce, Asia Pacific, Visa, said: “Nearly a quarter of the world's population – roughly 1.4 billion people – used the internet on a regular basis in 2008 and in Asia Pacific, on average, a person spent about 20.2 hours a month online. Our own survey has revealed online consumers in Asia Pacific recognize the convenience of online shopping as reflected in the high percentage of internet users who buy a wide range of products, from that for everyday use to the occasional high-value item online.”

In the region, Japanese and Koreans surveyed emerged as the most frequent shoppers, with 99 percent and 93 percent respectively having made an online purchase over the last 12 months. However, Australians were the biggest online spenders with an average 12-month tab of $4,160 – $680 more than Singaporeans, who are the next biggest online spenders.

In India, purchasing digital downloads was the most popular form of consumer e-commerce. Seventy-six percent of respondents from India, the highest among Asia Pacific, have bought a form of digital entertainment over the internet in the last 12 months. Music downloads (63 percent) emerged as the most popular digital entertainment purchase.

The internet has also brought about an increase in the number of cross-border transactions with 75 percent of internet users surveyed in Hong Kong having bought an item from an overseas website in the preceding 12 months. Visa (both credit and debit cards) was their most popular payment method with nearly 60 percent of online shoppers surveyed choosing to pay with Visa. Mohamad added: “With almost four in five internet users buying online, people in Asia Pacific are taking full advantage of the global shopping experience that the internet provides.”

Past 12 months online shopping spending by website category – Top 10 in Asia Pacific

1 Airlines / airline tickets
2 Online travel agents
3 Travel accommodation
4 Clothes / shoes
5 Car / motorcycle
6 Computer hardware (PC)
7 Food and groceries
8 Electrical appliances (TV, stereo, etc)
9 White goods (refrigerator, dishwasher, etc)
10 Other types of transportation for traveling

Average online spending in the past 12 months
1 Australia - US$4,160
2 Singapore - US$3,480
3 Japan - US$3,175
4 South Korea -US$3,027
5 India - US$2,147
6 Hong Kong -US$1,698

Source: Visa e-Commerce Tracking Survey