The overall salary increment for India's corporate sector stands at 9.1% in 2026, according to Ernst & Young's 'Future Of Pay' report. The report stated that this pointed towards a phase of "normalization and prudent workforce planning."
Global Capability Centres took the top spot with projected compensation increments at 10.4%. This indicated "sustained global demand and investment in specialized digital capabilities", the report said.
Financial services came in second at 10%, followed by e-commerce at 9.9% and life sciences and pharmaceuticals at 9.7%.
Overall, attrition saw a downturn to 16.4% in 2025, compared to 2024's 17.5%. More than 80% of the job exits were driven by voluntary action, which pointed towards the movement of talent being driven by opportunity and not restructuring efforts.
Services recorded the highest attrition at 24%, chiefly in the roles of sales, relationship management, and digital roles. Professional Services was at 21.3%, trailed by Hi-Tech and IT at 20.5%. Global Capability Centre's saw lower attrition at 14.1% in comparison to the aforementioned sector reaffirming stability in its sector growth.
"We are at a turning point in how organizations think about investing in their people. The future of pay in India is no longer defined by the size of the annual increment alone. It is increasingly about precision – deciding which skills to invest in, which outcomes to reward, and how to balance competitiveness with sustainability," Abhishek Sen, partner and leader, Total Rewards, HR Technology and Learning, People Consulting, EY India said.
"Rewards strategies are becoming more deliberate, with sharper differentiation and better use of data to guide decisions. At the same time, employees are looking beyond the size of the increment; they want clarity, fairness, and consistency in how pay decisions are made," Sen added.
Data analysis has also notably shaped the salary landscape. Around 50–60% of prominent organizations use analytics to plan compensation as per the report, using data to inform decision-making is now a "core part" of salary planning strategy.
The use of AI in rewards and learning functions has increased by three times over the past two to three years, implying a notable trend in line with more "intelligent and responsive people systems."
Upto 50% of the surveyed firms were shifting towards skill-based salary systems. Up and coming tech jobs such concerning AI, generative AI, machine learning and engineering which saw a 40% skill base premium.
Average variable pay as a percentage of fixed pay went up to 16.1% in 2025, an increase from 14.8% in 2024.
The gap between high and average performers increased, with top talent earning 120–150% of target payouts in comparison to average performers who received 60–80%, indicating an increased emphasis on pay-for-performance outcomes.
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