India Inc expected to offer 9.5% salary hike in 2025: Aon study

The engineering and manufacturing and retail industries project double-digit increases at 10 percent.

Salary increment for 2025 is expected at 9.5 percent, compared to an actual hike of 9.3 percent this year, shows a survey by professional services firm Aon.

The findings are part of the first phase of the 30th Annual Salary Increase and Turnover Survey 2024-25. The study analysed data across 1,176 companies from over 40 industries between July and August.

The engineering and manufacturing and retail industries are expected to offer a double-digit increase of over 10 percent in 2025, closely followed by financial institutions at 9.9 percent. This indicates the strategic importance employers place on talent in these sectors in the prevalent business landscape.

Although the year started on a cautious note for the technology sector, the sentiment looks optimistic as India nears 2025. Global capability centres and technology products and platforms expect a more optimistic salary hike of 9.9 percent and 9.3 percent, while technology consulting and services are expected to dish out at a lower end of 8.1 percent increment.

Looking at the attrition analysis, a downward trend is apparent with 16.9 percent churn recorded on average this year, compared to 18.7 percent reported in 2023 and 21.4 percent reported in 2022.

The Phase-II of the study will include data collected in December and January and will be published in early 2025.

“Despite evolving global economic challenges, our study indicates a positive business outlook across sectors in India. This sentiment continues in many of the domestically driven sectors illustrated by the projected increments in 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. Having a holistic rewards strategy based on data and analytics will ensure organisations attract and retain the right talent and continue to build a resilient workforce,” said Roopank Chaudhary, partner and head of reward solutions in India for Aon.