What do you want first—good news or bad news? Well, the bad news is that salary hikes are firmly on a downward trend this year across corporate India.
But you could take solace in the statistic that when it comes to real growth in wages when contrasted with the rate of inflation, real growth of wages is, for the first time in some years, going above the 5 per cent mark.
These are some of the findings of global professional services firm Aon’s Salary trends survey for this year. Aon has done the annual survey for about three decades across the globe.
Salaries are expected to increase by an average of 9.2 per cent only in 2025 —lower than last year’s 9.3 per cent and the (now what seems like) whopping 10.6 per cent increase seen in 2022, when companies were desperate to hold on to professionals.
But with attrition stabilising from the high of 21.4 per cent during the post-pandemic churn of 2022 to just 17.7 per cent now, corporates are also, to quote Aon India partner and rewards consulting leader for talent solutions, Roopank Chaudhary, “showing moderation in salaries” and calls it “an expected outcome given the margin pressure on companies.”
Aon’s analysis stems from global uncertainty (read: Trump) and softening growth. “The downward trend in projected salary increases could be in response to external factors like the geopolitical and economic developments, the potential impact of U.S. trade policies, conflict in the Middle East and the explosive pace of generative AI advancements,” according to Chaudhary.
Of course, the projected salary increase for 2025 varies from sector to sector, with engineering design services having the max increase at 10.2 per cent. Windfalls are also expected in areas like automobile manufacturing, NBFCs, retail, GCCs, real estate, life sciences, professional services, tech platforms and products, e-commerce and chemicals.
For sectors like FMCG, services, banking and tech consulting, the growth is less than the median average of 9.2 per cent. Some of these, according to Aon India officials, could also be due to the increasing play of AI on jobs like coding (which could explain why IT coding and tech consulting will see pressure on salary hikes).
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“Adopting a hands-on approach to total rewards and compensation practices and leveraging AI-driven innovation will enable India Inc to achieve sustainable growth in an increasingly automated environment,” said Amit Kumar Otwani, associate partner for talent solutions for India at Aon.
