Salaries in India expected to rise 10.3% in 2023: Aon

At junior levels, the non-merit increases are expected to be as high as 3.3 percent.

Salaries in India are expected to increase 10.3 percent in 2023, compared with an actual increase of 10.6 percent in 2022, according to a report.

The projected increase, which is slightly lower than that of last year, continues to be in double digits despite concerns about economic volatility and may be in response to attrition rates, Aon said February 23. The attrition rate in India remained high at 21.4 percent for 2022, it said.

According to the 28th Annual Salary Increase Survey in India by the global professional services firm, merit salary increases – based on individual performances – are projected to be steady at 7.8 percent.

Non-merit salary increases – additional factors such as market corrections, special adjustments and promotions – are expected to moderate to 2.8 percent, which is higher than the historical average. At junior levels, the non-merit increases are expected to be as high as 3.3 percent, it noted.

Aon analysed data across 1,400 companies from more than 40 industries.
Segment-wise, the projected salary increases are the highest at 12.2 percent in e-commerce and 11.2 percent in professional services. At the lower end, they are 9.7 percent in retail and in life sciences and 9.6 percent in other services.

“Rising economic uncertainty and concerns over economic volatility are making salary increase planning especially difficult this year,” Roopank Chaudhary, partner, human capital solutions for India at Aon, said in a statement. “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 platforms and products are somewhat 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, Chaudhary said.