In a recent report by Aon plc, a global professional services firm, it is projected that salaries in India will see a 9.5 per cent hike in 2024, slightly lower than the 9.7 per cent rise observed in 2023. This adjustment is largely attributed to market dynamics, as stated by the firm.
Based on Aon's annual salary increase and turnover survey 2023-24 for India, which analysed data from 1,414 companies across nearly 45 industries, it appears that salary increases in India are stabilising at high single digits after the significant increments seen in 2022 following the pandemic.
Roopank Chaudhary, partner and chief commercial officer for Talent Solutions at Aon in India, commented, "The projected increase in salaries in the Indian formal sector indicates a strategic adjustment in response to the evolving economic landscape."
India continues to lead among major economies in salary increases, despite geopolitical tensions, followed by Bangladesh and Indonesia with 7.3 per cent and 6.5 per cent average salary increases in 2024, respectively. The survey also indicated a decrease in overall attrition rates from 21.4 per cent in 2022 to 18.7 per cent in 2023, suggesting a competitive job market where turnover rates may have peaked.
Jang Bahadur Singh, director for Talent Solutions at Aon in India, noted, "In 2023, organisations navigated a challenging environment, balancing a generous average salary increment amidst high attrition rates. As leaders prepare for 2024, their focus is likely to shift towards building a supportive work environment to foster employee engagement in a dynamic job market."
Sectorwise analysis suggests that financial institutions, engineering, automotive, and life sciences are expected to offer the highest salary increases, while retail and technology consulting and services will see the lowest hikes.
The report also highlighted global uncertainties such as economic instability and conflicts, alongside the looming disruption from AI/ML technologies. Talent professionals are urged to adapt people strategies to enhance resilience and agility amidst changing business dynamics. Aon said India's potential as a key player in the upcoming wave of AI/ML-led disruption, citing the country's scale and capability on the global stage.