Salaries in India: what do you need to think about?

Wondering how much you can really save on your personnel costs if you out-source to India? Or have you started recruiting staff for your Indian branch and are you wondering what a realistic salary proposal is? These are the average salaries in India: From university graduates to telemarketers and skilled tradespeople. Please note that these are averages regardless of the experience, education, sector and location of the candidate.

Despite the fact that the average wages in India are still a lot lower than in Europe, the average monthly salary has risen rapidly in recent years. While the average salary was ₹19,492 (€221) in 2016, it has now almost doubled to ₹31,900 (€362). This sounds very advantageous, but this average also includes the very low salaries of the many Indian farm workers. As a foreign company, you cannot rely on this average. Depending on the region where you are located, the average salary will be higher or lower. Foreign companies are often looking for staff around the big cities and those salaries are a lot higher. For instance, in Mumbai, the average salary is ₹66,900 (€760), while in Chandigargh, a much smaller city, it is only ₹43,900 (€499).

Average salary in India based on experience, education and function

A candidate's level of education and experience obviously affect salary. In general, Indian workers with two to five years of experience earn on average 32% more than freshers and juniors across all sectors. Professionals with more than five years of experience earn on average 36% more than those with five years or less of work experience. When reaching ten years within a sector, salaries increase by 21% and by a further 14% when reaching 15 years or more of experience. Not only the years of experience count, but also changing jobs has an influence. Every time a person changes jobs, the salary increases by 30-35%. An important point to consider in the recruitment process. 

Of course, several aspects play a role in determining salary, such as education, position and location. In India, employees with a basic education earn on average 17% more than colleagues who have only completed secondary school. A Bachelor's degree increases the salary by an average of 24% and a Master's degree by another 29%. There is also a big difference between the different regions. In the big cities, the cost of living is much higher than in more rural areas. Salaries are, of course, adjusted accordingly. 

To get an idea of average salaries of different jobs and sectors, we have put together some examples. Please note that these are only examples and the experience, education, sector and location of the suitable candidate are not included in the examples below. Would you like more insight into the possible salary costs for your Indian entity? Please contact our experts, they can advise you on realistic salary proposals based on the sector you are active in, your location and your specific requirements.

Fight turnover with a competitive salary offer

In India, many companies suffer from high staff turnover. To attract and retain talented employees, it is very important that your salary is equal to or higher than the average salary for that position in India. In addition, you must comply with the rules of the Indian employment arena. Legal assistance in drafting employment contracts and conditions is therefore no luxury. It is also advisable to seek practical advice on best practices, so that the policy is not only legally compliant, but also HR-friendly. IndiaConnected is happy to support you in this process, including the recruitment and selection process and contract negotiations. 

The roadmap for employers to efficiently organise public holidays in India

In India, the number of public holidays that employees get off is not as clearly defined as in most European countries. So, when is your Indian staff entitled to a day off? Our expert Suhasini Sharma gives tips on how to organise your calendar as clearly as possible.

Diwali is one of the most important holidays in India

Holidays in India

In India, the number of paid days off that an employee can take is divided into 3 categories: 

• Earned leave - average of 12 days per year

• Casual leave (unscheduled) - 7 days per year on average

• Sick leave - average of 12-14 days per year

The minimum number of leave days that a company in India is required to provide to its employees depends on the state in which the company is located. While we have mentioned above the averages for each category of leave, this minimum varies from one Indian state to another and you cannot simply copy HR policies from other countries or even other Indian states. You should always check whether your policy complies with local regulations. Help from local experts is not an unnecessary luxury. 

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Suhasini Sharma

Growth Consultant

Suhasini Sharma has over 19 years of experience as a Business Intelligence Specialist and Customer Success & Growth Manager. As a Growth Consultant, she maximizes value for our clients' success by providing them with customized solutions, insights and guidance.

Her focus is cross-cultural collaboration, business development, strategy and Customer Relationship Management.

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Earned leave

"Earned leave, as the name suggests, is a form of leave that is earned by employees. On average, an employee gets 1 day of leave for every month that he or she works in your company," Suhasini explains. "The condition for taking these leave days varies from company to company, but normally 15 days notice must be given. Earned leave days are deductible if they are not taken. It depends on the employer whether the settlement of outstanding earned leave days takes place at the end of each year or at the end of the employment. In the latter case, the unused leave days can thus be carried over to the following year - the maximum carry-over is 30 - but it is not mandatory for employers to offer this possibility." 

Unscheduled leave

Unscheduled leave are days that can be taken by the employee just before the leave or on the day itself. "These are unexpected circumstances that result in the employee not being able to turn up at the office, such as a sick child suddenly being at home or, a very Indian problem, extreme weather and consequent huge traffic jams," says Suhasini. "Most employers do choose to limit the number of unscheduled leave days that can be taken consecutively, in many cases a person can take a maximum of two or three days of unscheduled leave in a row."

Sick leave

Sick leave can be taken for 1 or 2 days in a row, if an employee is sick for a longer period, he or she must be able to present a doctor's certificate. 

Roadmap to smartly organise public holidays in India

India has 3 public holidays on which all businesses have to close:

• Republic day - 26 January

• Independence Day - 15 August

• Gandhi Jayanti - 2 October

In addition to these three mandatory days off, dozens of public holidays are celebrated in India. When determining the number of public holidays your employees get off, it is important to check whether you are compliant with local regulations. All Indian states have set basic rules on this. Generally, a minimum of between 8 to 14 public holidays are given, depending on the state. This includes the three national holidays mentioned above and gives employers and employees the freedom to choose the other holidays themselves.

"In India, dozens of religious and regional holidays are celebrated, most of which are determined by the lunar calendar," says Suhasini. "This means that public holidays fall on a different day every year, so you have to be flexible with your planning. In addition, employers in India often have to deal with a diverse workforce that professes different religions and thus want to take time off at different times. Organising this can feel like a challenge, but there are smart ways to tackle it." 

This step-by-step plan will ensure that you organise your holidays as inclusively and efficiently as possible:

1. Legal guidelines

The number of public holidays you need to take off depends very much on your location. Therefore, it is important to be aware of the holidays that your state government gives off. Every year, around October/November, Indian states publish their list in local or national newspapers. The number of public holidays that companies have to give off is also announced. This number varies from 8 to 14 days per year, depending on your location. Therefore, if you operate in several states, the number of days off may vary between your locations.

2. What are other companies doing in your area?

Apart from being aware of local regulations regarding public holidays, India also has regional holidays and, due to the use of the lunar calendar, national holidays fall on a different date in different locations. It is therefore smart to check which public holidays the companies in your region have released in recent years. This will give you a good benchmark of the most important public holidays in your state.

3. Demographic data of your employees and customers

As the holidays are important times for employees to celebrate and get together with their families, the demographics of your employees are important in determining the days you give off. Map this out and don't forget to look at your clientele. If you have many international clients, they will probably want a clear overview of the days when the office is closed or when some of the staff is absent. This could mean less flexibility for your employees. If you have many Indian clients, both in and outside your state, then you should also take into account the holidays that are relevant to them.

4. Choose a flexible or fixed approach

There are two ways to approach the release of public holidays, with a flexible or fixed list. If you opt for a flexible approach, you offer your staff the chance to take holidays that are important to them. Here's an example:

• Your company is required by the guidelines to offer 10 public holidays and you have a very diverse workforce. You therefore choose to give the entire office time off during the 4 biggest and most important public holidays in India (though this will of course depend on your staff demographics), which are Diwali, Eid, Christmas and Vaisakhi (an important holiday in both Sikhism and Hinduism), and the 3 national holidays. For the other 3 days, your employees can choose on which time they would prefer to have time off by submitting these days to you. These are called non-standard holidays because not every employee, but only a specific group will have this day off. 

This approach is becoming increasingly popular in India as it is the most inclusive. But for companies with a large workforce or international customers, this can be difficult to implement. In this case, you can also choose to compile a list of public holidays yourself, based on regional rules and preferences, and share it with your employees and customers. 

"If you are in doubt about which holidays to include in your policy, it is good to know that Indians do not mind taking an unscheduled or earned day off for a holiday that is important to them," says Suhasini. "I'm not talking about an important festival like Diwali - you won't be able to get an Indian to the office on that day - but about lesser celebrated days. Moreover, it is not customary in India to be paid twice if an employee has to work on a public holiday; instead, this is compensated for by offering extra days off at a later date when needed, a so-called compensatory leave. These days off are similar to earned leave and can therefore be taken or credited."

The guide for employers in India

Finding, hiring and retaining staff in India, whether remote or as part of your entity, involves a lot. You have to deal with new challenges during recruitment, different rules regarding contracts and differences in the work culture. To make it all a bit clearer for you as a European employer, IndiaConnected has created a special guide with advice for every challenge you may face.

Six tips to enjoy working in India

Working in India is a joy - at least if you have a bit of an adventurous European merchant's spirit. Michel Koopman, who runs the Leela hotel in Gurgaon, is just such a person. "It's fun to work with Indians," Koopman says enthusiastically. "The fact that they speak English helps tremendously. Quite a difference from China. If you make a joke there, they don't understand you. With Indians, you can laugh."

Gosse Wielinga at the Suzlon factory in India (Photo: Suzlon)

Gosse Wielinga who works for the large Indian wind energy company Suzlon also has an "incredible time in India." Wielinga thrives in the informal corporate culture at family-owned Suzlon, which he compares to the Dutch polder culture.

Or take Jos van Haaren, former research leader at the Philips innovation campus, who recently returned to Eindhoven. During the interview, he seemed almost homesick for India. "I would have liked to have stayed longer," he said with regret in his voice.

Even hockey coach Paul van Ass, who was sacked after only five months as national coach of the Indian hockey team, has good memories of India. He hopes to do business there again.

Jos van Haaren at the Philips Innovation Campus in Bangalore (Photo: Berkeley - Haas)

Six tips to make working in India a joy:

1. Take young employees by the hand

"Indians are very ambitious, they fight to get ahead. You can see that at the baggage belt at the airport: everyone is in the lead. You can see it on the work floor as well. There are a lot of young people who are very driven. The trick is to take them by the hand and tap into their potential. That gives me great satisfaction. Gosse Wielinga, Suzlon Energy

2. Enjoy the game

"To make a good deal, you have to play the game Indian style. That means sometimes you have to say you have no time or not answer the phone. Then you play the difficult European, while your staff massage the other party in the meantime. This way of doing business can be frustrating in the beginning, but after a while you learn to enjoy the game. Then you become half an Indian." Gandert Roosen, Roosen Industries.

3. Use an interpreter

"Of course, many Indians speak excellent English, but even though you speak the same language, that doesn't mean you understand each other. An interpreter who knows both cultures can bridge the gap between Europeans doing business in India and their Indian executives, partners and/or employees." Gosse Wielinga, Suzlon Energy.

4. Give smart feedback

"Never publicly attack a manager. That is fatal. If you want to share critical ideas, do it in private. That is often appreciated and they usually do something with it." Gosse Wielinga, Suzlon Energy.

5. Set aside more time than usual to prepare properly

"Many foreigners who have been to India on business are dead tired when they get back on the plane to Europe. This is often because they do not take enough time in India. If you have an important meeting on Monday, fly the Friday before. That way you can acclimatise and appear fresh and sharp at your appointment." Gosse Wielinga, Suzlon Energy.

6. Be flexible

"In India, it is often not quite clear how things work. If that bothers you, working in India takes a lot of energy. But if you can deal with it, it's actually a lot of fun. As a foreign company or employee, you have to ask yourself whether you can thrive in such an environment." Jos van Haaren, Philips.

Realize effective collaboration and higher efficiency with your Indian team

Is your cooperation with your Indian employees going a bit awkwardly? Or are they not delivering the results you expected? With our online and offline group trainings we improve the performance of your team in Europe and India. Our training courses cover topics such as self-management, constructive feedback, team building, effective communication, dealing with mistakes and setbacks, strategy, planning and, of course, decision-making.

This is how we help achieve effective collaboration and higher efficiency. Find out more here: