Solace from inflation: Companies hike salaries by 40 per cent

PTI, On Monday 21 March 2011, 2:14 PM
New Delhi: With day-to-day living turning costlier, companies have raised salaries to as high as 40 per cent especially at the junior levels, say experts.In recent times, inflation has been at high levels due to soaring prices of essential commodities.

"Inflation has affected the salary hikes towards the higher side," executive search firm GlobalHunt's director Sunil Goel told PTI.

"As inflation has raised cost of living, so direct impact is visible more at junior and entry level where companies have increased salaries up to 30-40 per cent," he said.

Last month, inflation climbed to 8.31 per cent as compared to 8.23 per cent in January. Food inflation stood at 9.42 per cent in the week ended March 5.

As such attrition rates along with inflation had prompted companies to enhance the overall basic salary structures to "15-20 per cent at all the employment levels", Gi Staffing Services' Branch Head (Mumbai) Swapnil Jain said.

India is expected to see one of the highest salary hikes this year at 12.9 per cent, according to global HR consultancy Aon Hewitt. Last year, actual increase was around 11.7 per cent.

"Inflation decreases the propensity to save; therefore the organisations try and match up to the salary packages of the employees to the same extent," Elixir Web Solutions' HR Manager Geeta Verma said.

Elixir is a leading recruitment process outsourcing firm. "The hike in inflation rates has enabled organisations to provide competitive salaries so that ratio of expenses/savings remains proportionate to the increasing levels of inflation," Verma noted.

Aon Hewitt has projected salaries of general/entry level staff to be 12.7 per cent in 2011 as compared to 11.4 per cent last year. It had pointed out the rise could be attributed to high turnover (attrition) rates and high inflation rates.

However, experts feel that inflation has not pushed salaries to higher levels in companies across the board since some entities also look at pay parity for their employees

Source:-http://in.finance.yahoo.com/news/Solace-inflation-Companies-yahoofinancein-3740029152.html?x=0

Saudi Stocks Slump Most Since 2008 on Concern Unrest to Spread

Saudi Arabia’s benchmark stock index plunged the most since November 2008 and entered bear-market territory on concern political unrest in the Middle East may spread to the kingdom.
Al-Rajhi Bank fell to the lowest in a year and Saudi Basic Industries Corp., the world’s biggest petrochemicals maker, tumbled 7.8 percent. Saudi Arabia’s Tadawul All Share Index slumped 6.8 percent to 5,538.72 at the 3:30 p.m. close in Riyadh. The measure has lost 20 percent since reaching its 2010 high, the common definition of a bear market. Credit-default swaps linked to Saudi Arabia, used as a measure of confidence although they reference no debt, rose 4 basis points to 140, according to CMA prices in London.
“Performance in Saudi exemplifies that geo-political risk still remains unresolved within the region,” said Omair Ansari, equity strategist at Gulfmena Alternative Investments in Dubai. “We still have rumors of protests within the kingdom for March 11 and 20, which provides for a level of uncertainty, even if they do not transpire. Markets will continue to capitulate due to the inability to price in top-down risk.”
Political turmoil in the region has spread to the Persian Gulf, with protests erupting in Oman and Bahrain inspired by popular uprisings that toppled leaders in Tunisia and Egypt. Websites have called for a nationwide Saudi “Day of Rage” on March 11 and March 20, Human Rights Watch said in a statement yesterday.
‘Flooded With Fear’
“The market is flooded with fear and investors cannot seem to find anything that reassures them of a possible light at the end of the tunnel,” said Amro Halwani, senior equity sales trader at Shuaa Capital PSC in Riyadh. “Right now it’s a rumor- driven market and cash seems to be the safest place to be in.”
Prince Talal Bin Abdul Aziz Al Saud, a member of Saudi Arabia’s royal family, said on Feb. 17 that the kingdom may see protests unless King Abdullah introduces reforms, according to BBC Arabic TV.
The king boosted spending on housing by 40 billion riyals ($10.7 billion) on Feb. 23. The social security budget was raised by 1 billion riyals and he also ordered the creation of 1,200 jobs in supervision programs and made permanent a 15 percent cost-of-living allowance for government employees, according to a statement on state-run television.
Saudi Arabia is the world’s biggest exporter of oil and the largest Arab economy. Crude gained 0.9 percent to $97.81 a barrel at 8 a.m. in electronic trading on the New York Mercantile Exchange.
Cleric
Authorities “should immediately release” Tawfiq al-Amir, a Shiite cleric in the country, who was apparently arrested after he called for a constitutional monarchy and equal rights for the Shiite minority, Human Rights Watch said in its statement.
Al-Rajhi, the country’s largest publicly traded lender by market value, fell 2.7 percent to 71.5 riyals, the lowest since January 2010. Sabic decreased to 86 riyals, the lowest since Sept. 1.
Oman’s measure surged 4.1 percent after slumping 4.9 percent yesterday. The DFM General Index rose 1 percent. Kuwait’s SE Price Index dropped 2.5 percent and Bahrain’s BB All Share Index fell 0.5 percent. Abu Dhabi’s ADX General Index retreated 0.6 percent.
To contact the reporters on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net; Alaa Shahine in Dubai at asalha@bloomberg.net
To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

Article Source:-http://www.bloomberg.com/news/2011-03-01/saudi-stocks-slump-most-in-world-on-concern-unrest-may-spread-to-kingdom.html