India Inc expected to hike salaries by 9.5% in 2025: Aon survey

India Inc is expected to give an average salary increase of 9.5 per cent in 2025, as per the latest survey released by Aon. This increase is led by the engineering and manufacturing and retail sectors, which are projected to hike salaries by 10 per cent in 2025, closely followed by financial institutions at 9.9 per cent hike, indicating the strategic importance that employers place on talent in these sectors in the current economic landscape, the survey added. 

The study analysed data across 1,176 companies from over 40 industries between July and August 2024. Aon said that phase one of the study shares the current year’s actual increase and gives an early indication of the salary increases expected in 2025. Phase two of the study will include data collected in December and January and will be published in early 2025.

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“The first phase of the study revealed that salaries in India are projected to increase by 9.5 per cent in 2025, compared to an actual increase of 9.3 per cent in 2024,” Aon noted. 

The study added that despite cautiousness in the technology sector, the sentiment is optimistic in 2025. Global capability centres and technology products and platforms expect a more optimistic salary increase of 9.9 per cent and 9.3 per cent, respectively, while technology consulting and services projected increments at the lower end of 8.1 percent, it added. 

Roopank Chaudhary, partner and head of reward solutions in India for Aon, said, “Despite evolving global economic challenges, our study indicates a positive business outlook across several sectors in India. This sentiment continues in many of the domestically driven sectors, illustrated by the projected increments in the manufacturing, life sciences, and retail industries. Organisations committed to retaining talent in a competitive job market must keep abreast of changing market data and understand the rapidly evolving compensation trends.”

The study also pointed to a downward trend in attrition, which was reported at 16.9 per cent on average in 2024, compared to 18.7 per cent in 2023 and 21.4 per cent in 2022.

Tarun Sharma, associate director for Talent Solutions in India for Aon, said, “The softening in attrition provides businesses a unique opportunity to focus on internal growth, capability building, and driving long-term productivity. By cultivating and developing talent internally, firms can reduce the necessity for higher costs associated with new hires while simultaneously enhancing their organisation’s employee value proposition.”