The Indian job market is expected to witness a 9.2% salary increase in 2025, slightly lower than the 9.3% hike in 2024, according to the Annual Salary Increase and Turnover Survey 2024-25 India by Aon plc. Despite global economic uncertainties, India’s stable growth outlook, driven by improving rural demand and strong private consumption, is supporting competitive salary increments.

Industry-Wise Salary Growth Trends

The highest salary hikes in 2025 are projected in the engineering design services and automobile/vehicle manufacturing sectors, which continue to experience strong demand and technological advancements. Other industries poised for significant pay increases include:

• Non-Banking Financial Companies (NBFCs) – Buoyed by credit growth and expanding financial services, NBFCs are expected to offer attractive compensation to retain talent.
• Retail – The sector benefits from growing consumer spending and expansion of e-commerce, driving hiring and salary growth.
• Global Capability Centers (GCCs) – India remains a preferred hub for multinational corporations’ GCC operations, leading to increased demand for skilled professionals.
• Life Sciences – A surge in pharmaceutical and biotechnology innovations, coupled with increased healthcare investments, is fueling demand for talent.

Impact of Global Uncertainty on Salaries

While the Indian economy remains relatively stable, external factors such as geopolitical tensions, evolving US trade policies, conflicts in the Middle East, and advancements in generative artificial intelligence (AI) may influence salary increments. Companies are likely to adopt a cautious approach, balancing talent retention with business sustainability.

Declining Attrition Rates Indicate Workforce Stability

The report highlights a decline in attrition rates, which dropped to 17.7% in 2024, compared to 18.7% in 2023 and 21.4% in 2022. The post-Great Resignation period has seen a more stable workforce, with fewer employees switching jobs for salary hikes.

Despite a rise in self-employment and entrepreneurship, an increased labour force participation rate allows companies to focus on workforce skilling, reskilling, and institutional support to enhance employee retention.

The Role of Technology and Data in Salary Trends

Experts at Aon emphasize that data-driven market analysis and advanced workforce analytics play a critical role in understanding shifts in salary trends. The 30-year-old study remains one of India's most comprehensive salary and reward studies, analyzing data from over 1,400 companies across 45 industries.

Conclusion: Salary Growth Despite Challenges

While salary hikes in India are expected to moderate slightly in 2025, they remain higher than most global markets. With a stable economic outlook, growing demand for skilled workers, and government-backed workforce initiatives, the Indian job market continues to offer competitive compensation growth despite global headwinds.

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