Salaries in India are projected to rise by an average of 9.2% in 2025, slightly lower than 9.3% in 2024, according to Aon’s Annual Salary Increase and Turnover Survey 2024-25. Despite global economic challenges, the study highlights that India’s salary growth remains stable, reflecting confidence in the country’s financial outlook.
Declining Attrition and Its Impact on Salaries
The trend of declining salary increments has been ongoing since 2022, when companies offered 10.6% raises due to the Great Resignation. However, attrition rates have now dropped significantly, reaching 17.7% in 2024, compared to 18.7% in 2023 and 21.4% in 2022. The availability of a larger talent pool has eased wage pressures, contributing to more moderate salary hikes.
External Factors Influencing Salary Trends
Several external factors are contributing to this salary hike moderation. According to Roopank Chaudhary, Partner at Aon, geopolitical tensions, evolving US trade policies, conflicts in the Middle East, and rapid advancements in AI are shaping corporate compensation strategies. Despite these uncertainties, India’s economy remains resilient, driven by strong rural demand and steady private consumption.
Which Sectors Will See the Highest Pay Hikes?
Salary increments will vary across industries. Engineering design services and automobile manufacturing are expected to see the highest increases at 10.2%, followed by non-banking financial companies (NBFCs) at 10%. Other industries may experience more modest salary growth, reflecting sector-specific market conditions and company strategies.
The Role of AI and Innovation in Salary Trends
The report also emphasizes the role of AI-driven compensation strategies in ensuring sustainable workforce growth. Companies are increasingly leveraging data analytics and digital transformation to refine salary structures and workforce management.
