Salary increments in India are expected to stabilise in 2025, according to the Aon’s Annual Salary Increase and Turnover Survey 2024-25 India. The study, now in its 30th year and one of the largest and most comprehensive rewards studies in India, analysed data from over 1,400 companies across 45 industries.

The study shows that salaries in India are set to rise by 9.2 percent in 2025, a slight decline from the increase of 9.3 percent in 2024, amidst global uncertainty and softening growth. This indicates a trend of declining salary increments since 2022 when companies provided 10.6 percent salary increases influenced by the Great Resignation.

Salary increments are also projected to vary across industries with engineering design services and auto/vehicle manufacturing budgeting for the highest salary increases followed by nonbanking financial companies, retail, global capability centres and life sciences.  

“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 U.S. 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.”

The study also reveals that overall attrition rates declined to 17.7 percent in 2024 from a high of 18.3 percent in 2023 and 21.4 percent in 2022, indicating the availability of a larger talent pool post the Great Resignation. This stability in talent availability 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. 

“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,” said Amit Kumar Otwani, associate partner for Talent Solutions for India at Aon. “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.”

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