Salaries in India are projected to be hiked by 10.3 per cent on average in 2023, a tad lower than last year, according to Aon’s latest survey. Last year’s average salary increase was estimated at 10.6 per cent.

At 21.4 per cent, the attrition rate in 2022 remained high, and was attributed to an ever-changing talent strategy and the gap between supply and demand for talent, the company said.

Aon’s Annual Salary Increase Survey added that the projected hike continues to be in double digits despite concerns about economic volatility

Salaries in sectors such as e-commerce and professional services is projected to increase by 11-12 per cent, and in retail by 9-10 per cent.

In a statement, Roopank Chaudhary, partner, Human Capital Solutions, India at Aon, said, “Rising economic uncertainty and concerns over economic volatility make planning a salary increase especially difficult this year. India Inc. has awarded aggressive salary increases over the last two years, which has some companies grappling with higher wage bills.”

Globally, connected industries such as technology platform and products, are cautious in their salary budgets, while industries driven by domestic demand, such as manufacturing or FMCG/FMCD, are bullish on their budget planning as compared to their five-year averages, the report noted 

“Forward-looking organisations are, therefore, contextualising salary increase planning with data-driven analysis and the unique circumstances of their own industry and organisation, to maintain the resilience of their workforce and to make informed decisions,” Choudhary said.

The merit increase projections (increase based on individual performance) remain steady at 7.8 per cent. The non-merit salary increase projections (increases done on top of merit, based on market corrections, special adjustments and promotions) is estimated at 2.8 per cent. “This is particularly noteworthy at junior levels where the non-merit increase projections are as high as 3.3 per cent,” it added .

Pritish Gandhi, director and leader of the Executive Compensation and Governance Practice in India at Aon, said, “The non-merit salary increase projections continue to move up as firms budget to retain talent through promotions and off-cycle corrections. As companies look to differentiate and optimise their talent spend, employers are investing more on critical talent in key roles.”

The study analysed data across 1,400 companies from more than 40 industries.

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