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 structure 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.