Employee compensation in the IT services sector is expected to soften in 2026 amid global market volatility and the accelerating shift towards artificial intelligence, according to Deloitte's latest Talent Outlook report. In contrast, overall salary growth across India Inc. is projected to remain broadly stable next year.
"The technology sector bears the maximum impact of volatility in global markets, including the changes underway due to AI shifts. The industry has also seen moderation in growth rates, and all of this is being reflected in compensation cost budgets," said Anandorup Ghose, Partner, Deloitte India, according to The Hindu Business Line.
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IT Services Growth In 2025 And 2026
The IT services sector, which recorded growth of about 7.6% in 2025, is projected to slow to 6.9% in 2026, making it the weakest-growing segment among all sectors analysed by Deloitte.
While Global Capability Centres (GCCs) are also expected to see marginal moderation, their growth remains relatively stronger, easing slightly from about 9% in 2025 to 8.8% in 2026.
Reflecting a cautious outlook, both IT services and product companies have lowered their growth and compensation projections by 10 to 70 basis points compared with last year.
GCCs continue to stand out within the broader technology ecosystem, offering salaries that are typically 20-25% higher than those in traditional IT services firms, where average compensation ranges between Rs 12-15 lakh per annum.
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IT Services Decline
The IT services industry exhibits a pronounced performance distribution, featuring a scarcity of top achievers and a larger concentration of performers within the middle or right side of the distribution curve. Promotion rates in this segment persist at 11-12%. Nonetheless, GCCs continue to be an overall growth area.
Sector-Wise Compensation Hikes In 2026
Outside technology services, several sectors are expected to see stronger salary growth in 2026. Pharmaceuticals are projected to offer average hikes of about 10.1%, up from 9.8% in 2025, while the life sciences sector is expected to see increases of around 9.9%.
Manufacturing firms are forecast to roll out average salary hikes of about 9.8%, slightly higher than last year. Within manufacturing, automotive OEMs are expected to offer increments of around 10.3%.
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Power and renewable energy companies are projected to deliver hikes of about 10.4%, while semiconductor firms may see average increases of around 10.1%.
In the financial services sector, overall salary growth is expected to rise to about 9.1% in 2026, compared with 8.9% in 2025. NBFCs are likely to offer increments of around 9.5%, while asset management firms may see hikes of approximately 9.4%.
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