NEW DELHI: The salary increments in India are expected to stabilise in 2025 with a rise of 9.2 per cent during the year, according to a survey conducted by professional services firm Aon. This is slightly lower than an increase of 9.3 per cent reported in 2024, amidst global uncertainty and softening growth. However, the survey report maintained that this indicates a trend of declining salary increments since 2022 when companies provided 10.6 per cent salary increases influenced by the Great Resignation.
The engineering design services and auto/vehicle manufacturing industries are poised to offer the most substantial wage hikes at 10.2 per cent, followed by Non Banking Financial Companies (NBFCs) at 10 per cent and Retail (incl. Wholesale and Distribution) at 9.8 per cent.
Meanwhile, the Technology Consulting and Services segment is expected to offer the lowest hikes to employees, at 7.7 per cent, followed by the Telecommunication segment which is expected to record a wage hike of 8.0 per cent during the year.
“Despite external uncertainties, India’s economic prospects remain stable, with rural demand improving and private consumption maintaining momentum. The downward trend in projected salary increases could be in response to external factors like the geopolitical and economic developments, the potential impact of US trade policies, conflict in the Middle East and the explosive pace of generative AI advancements,” said Roopank Chaudhary, partner and rewards consulting leader for Talent Solutions for India at Aon.
“Our data shows that moderation in salaries is an expected outcome given the margin pressures on companies. The sector-wise increment trends for 2025 reflect prudence and adaptability as companies balance market challenges and the need to attract and retain talent across sectors,” he added.
According to the report, 1 out of 2 companies are anticipating a top-line growth of >10 per cent, and hiring sentiment is also positive, with 2 out of 5 planning to increase the workforce by >10 per cent.
In terms of attrition rates, per the survey report, it declined to 17.7 per cent in 2024 from a high of 18.7 per cent in 2023 and 21.4 per cent in 2022, indicating the availability of a larger talent pool post the Great Resignation. The stability in talent availability, it added, is an outcome of increased labour force participation despite a rise in self-employment and entrepreneurial activity, which presents an opportune time for companies to focus on strategic workforce skilling, reskilling and institutional support.
Aon said that there is a decline in overall attrition as both employees and organisations maintain a wait and watch approach.
Amit Kumar Otwani, associate partner for Talent Solutions for India at Aon, said, “In a globally interconnected world, shifting governments, businesses and workforce behaviours and expectations could impact the Indian economy and subsequently the local talent landscape. A comprehensive analysis of market behaviours, robust datasets and advanced technology are essential to anticipate shifts and prepare accordingly. Adopting a hands-on approach to total rewards and compensation practices and leveraging AI-driven innovation will enable India Inc to achieve sustainable growth in an increasingly automated environment.”
In terms of countries to offer the most salary hikes, India has topped the charts with a 9.2 per cent rise, followed by Indonesia at 6.1 per cent increase and China at 5.3 per cent.
Aon’s Annual Salary Increase and Turnover Survey 2024-25 India has analysed data from over 1,400 companies across 45 industries.
Source: The Financial Express
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