Indian salaries will increase by 9.2% in 2025, with the largest pay hikes likely to occur in manufacturing sectors and global capability centers (GCCs), according to a survey that was published on Wednesday.
With continuing world uncertainties and decelerating growth, the 9.2% growth is a modest decline from 9.3% growth in 2024. India's salary increases will stabilize in 2025, according to Aon's new "Salary Increase and Turnover Survey 2024-25 India."
This dip in compensation growth began in 2022, when companies had given a larger 10.6% increase owing to the "Great Resignation."
The report adds that salary increases will vary across industries, with the largest increases being seen in engineering design services and automotive/vehicle manufacturing, followed by financial businesses, retail, GCCs, and life sciences.
India's economic prospects are strong despite worldwide concerns, with private consumption remaining on its trajectory and rural demand growing, according to Roopank Chaudhary, partner and rewards consulting leader for Talent Solutions at Aon. The study examined data from almost 1,400 firms in 45 industries.
Global concerns like geopolitical tensions, potential shifts in US trade policies, Middle Eastern conflicts, and rapid growth of generative AI are likely to be the main catalysts for the projected drop in salary growth.
"The industry-by-industry trends in expansion for 2025 are one of caution and resilience as companies weigh market stress against the requirement to attract and retain talent," Chaudhary stated.
The study further found that overall attrition levels declined from 18.3% in 2023 and 21.4% in 2022 to 17.7% in 2024. The decline indicates a larger talent pool on hand subsequent to the 'Great Resignation.'
Higher labor force participation, in spite of higher self-employment and entrepreneurship activity, is the reason for this rise in the supply of talent. It is an ideal time for organizations to invest in skilling, reskilling, and institutional support for the workforce.
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