HVS Executive Search Releases the 2010 India Salary Report

The icy winds of global recession have adversely impacted several Indian industries, especially hospitality. A steady fall in revenue has forced hotel companies to tighten their belts, right size their workforce and take a hard look at compensation packages across the board. These observations are supported by the findings indicated in the 2010 India Salary Report, presented by HVS Executive Search, the leading advisory and executive search firm specialising in the hospitality industry.

This report is a follow-up to the immensely popular 2008 India Salary Report and as before, provides the most comprehensive and current guide to compensation trends for the Indian hotel industry. The 2010 Report includes data from over 200 hotels across 52 markets, a marked increase from the 160 participants in previous years.

Speaking on the release of the 2010 Reports, Manav Thadani, Managing Director HVS India said, "The Indian hospitality industry is poised to grow exponentially. With this impending growth, we at HVS expect a steep rise in demand for trained manpower to help hotels perform optimally in an increasingly competitive market."

Natwar Nagar, Executive Director HVS Executive Search India added, "Owing to the severities of the downturn, companies are under intense pressure to rationalise their pay scales. This would be the second consecutive year of no or very limited increments given to most hospitality employees. With the expected opening of 50,000 new rooms across the country, HR Directors are working aggressively to implement retention strategies for key employees. The compensation range for most companies in the current year is under consideration and we believe that the average increase would be in the range of 10-15% for key operating functions."

Results from the 2010 survey indicate that the median salaries for positions across the hotel hierarchy have seen dramatic movement. While declines have been observed in all departments, Resident Managers have been the worst affected with a 46% fall in their median salaries. HVS observes that while the position is not being rendered redundant, it is certainly experiencing a strike-off from the hierarchy of several hotel companies across India. A number of Resident Managers have been promoted with no replacements being proffered.

Excerpt from the 2010 India Salary Report

For other departmental head positions, the decline in salaries may be attributed to a combination of reasons including:

• Salary rationalisation for Department Head positions;
• Internal promotions which provide the employee a larger span of control with only a notional hike in overall compensation;
• Recruitment at lower compensation levels than standard benchmarks;
• Redundancies;
• Emergence of Budget and Economy hotels that have significantly lower compensation trends compared to First Class and Luxury hotels.

The survey also shows that salaries of departmental heads in the Front Office and Food & Beverage divisions have seen an increase, therefore indicating a renewed requirement for quality professionals to guide these revenue producing areas more efficiently through this economic storm. The rise in Food and Beverage salaries may also be attributed to the emergence of excellent stand-alone restaurants and food chains that are recruiting professionals from the hotel industry at extremely competitive packages.

The 2010 India Salary Report includes data for 75 Executive Committee, Department Head and Line Level positions and includes Annual Base Salary for:

• Luxury and First Class Hotels
• Mid Market Hotels
• Budget and Economy Hotels
• Hotels in emerging markets (Tier 2 & 3 cities)
• Corporate positions at hotel companies
• Analysis by room count
• Bengaluru, Chennai, Delhi – NCR, Goa, Hyderabad, Kolkata and Mumbai

For more information on the 2010 India Salary Report and a detailed city-wise analysis of additional room supply and its subsequent impact on manpower requirement please contact Anupama Jaiswal (AJaiswal@HVS.com) and Siddharth Choudhry (SChoudhry@HVS.com) on +91 (124) 461-6046.