Salaries In India Set To Rise THIS MUCH In 2025 Amid Global Challenges: Report

The study, which analysed data from over 1,400 companies across 45 industries, also found that attrition rates appear to be easing within India Inc

Salaries in India are expected to rise by an average of 9.2 per cent in 2025, slightly lower than the 9.3 per cent increase seen last year amid global uncertainty and slower growth, according to global professional services firm Aon.

Aon’s Annual Salary Increase and Turnover Survey for 2024-25 suggests that despite rising global challenges, India is poised for stable economic growth, with salary increments in the country expected to stabilise in 2025.

The study, which analysed data from over 1,400 companies across 45 industries, also found that attrition rates appear to be easing within India Inc. Salary increases have been on a decline since 2022, when companies offered an average 10.6 per cent rise, largely driven by the Great Resignation.

The overall attrition rate has decreased to 17.7 per cent in 2024, down from 18.7 per cent in 2023 and 21.4 per cent in 2022, signalling a larger talent pool available following the Great Resignation.

Roopank Chaudhary, partner and rewards consulting leader for Talent Solutions for India at Aon, said, "The downward trend in projected salary increase 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.”

Chaudhary, however, stressed that despite external uncertainties, India's economic outlook remains stable, supported by improving rural demand and sustained momentum in private consumption.

The study also noted that pay hikes are expected to vary across industries, with engineering design services and auto/vehicle manufacturing sectors planning the highest salary increases at 10.2 per cent. Non-banking financial companies follow closely with an anticipated increase of 10 per cent.

"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," noted Chaudhary.

The study also highlighted that adopting a hands-on approach to total rewards and compensation practices, along with leveraging AI-driven innovation, will help India Inc. achieve sustainable growth.

"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,” opined Amit Kumar Otwani, associate partner for Talent Solutions for India at Aon.