Salaries in India to rise 9.2% in 2025 amid global uncertainty, softening growth: Study

New Delhi: Salaries in India are set to rise by an average 9.2 per cent in 2025 as compared to 9.3 per cent last year, amid global uncertainty and softening growth, leading global professional services firm Aon plc said.

According to the firm’s Annual Salary Increase and Turnover Survey 2024-25, amid the rising global uncertainty, India is poised for a stable growth story, and salary increments in the country are expected to stabilise in 2025.

The study that analysed data from over 1,400 companies across 45 industries noted that attrition seems to be easing down for India Inc.

There has been a trend of declining salary increments since 2022, when companies provided an average 10.6 per cent salary increase influenced by the Great Resignation.

The overall attrition rate declined to 17.7 per cent in 2024 from 18.7 per cent in 2023 and 21.4 per cent in 2022, indicating the availability of a larger talent pool post the Great Resignation.

"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,” said Roopank Chaudhary, partner and rewards consulting leader for Talent Solutions for India at Aon.

Chaudhary, however, added that despite external uncertainties, India's economic prospects remain stable, with rural demand improving and private consumption maintaining momentum.

Pay hikes are projected to vary across industries with engineering design services and auto/vehicle manufacturing budgeting for the highest salary increases of 10.2 per cent, followed by non-banking financial companies at 10 per cent, the study said.

"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," Chaudhary said.

The study further noted that applying a hands-on approach to total rewards and compensation practices and leveraging AI-driven innovation will enable India Inc to 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,” said Amit Kumar Otwani, associate partner for Talent Solutions for India at Aon.

The study, now in its 30th year, is one of the largest and most comprehensive rewards studies in India.