India Inc is likely to increase salaries on an average by 9.2 per cent in 2025, marginally lower than 2024, amidst global uncertainty including Trump’s trade policies and softening global growth, according to the latest survey released by Aon.
Engineering design services and auto and vehicle manufacturing sectors are expected to top the charts with 10.2 per salary increase, the highest, followed by non banking financial companies (10 per cent) and retail (9.8 per cent).
“Three in five organisations are expected to give equal or more than 9 per cent increase in salaries in 2025,” the survey noted.
The survey titled “Aon’s Annual Salary Increase and Turnover Survey 2024-25 India,” analysed data from over 1,400 companies across 45 industries. At 9.2 per cent projected salary increase this year indicates a trend of declining salary increments since 2022 when companies provided 10.6 percent salary increases influenced by the “Great Resignation,” it added.
“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 US trade policies, conflict in the Middle East and the explosive pace of generative AI advancements,” said Roopank Chaudhary, Partner and Rewards Consulting Leader, Talent Solutions for India at Aon. He added that moderation in salaries is an outcome of margin pressures on companies and reflects prudence and adaptability as companies balance market challenges and the need to attract and retain talent across sectors.
Global Capability Centres, engineering and manufacturing besides real estate and infrastructure sectors are expected to hike salaries by 9.7 per cent.
Meanwhile, the study also revealed that overall attrition rates declined to 17.7 per cent in 2024 from a high of 18.7 per cent in 2023 and 21.4 per cent in 2022, indicating the availability of a larger talent pool. This stability in talent availability is an outcome of increased labour force participation despite a rise in self-employment and entrepreneurial activity. The study noted that this is also an opportune time for companies to focus on strategic workforce skilling, reskilling and institutional support.