Indian Employees Likely To Receive Average Salary Hike Of 9.4% In 2025, Says Report
Manufacturing and engineering follow closely with an increase from 8% to 9.7%, reflecting a resurgence in the manufacturing ecosystem.
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Indian employees may expect an average salary increment of 9.4% this year across industries, indicating strong economic growth and rising demand for skilled talent, a report said on Tuesday. Over the last five years, salary increments have steadily increased, rising from 8% in 2020, to a projected 9.4% in 2025, according to Total Remuneration Survey by HR consulting firm Mercer.
The automotive sector leads with anticipated increments of 10% from 8.8%, driven by the surge in electric vehicles and the government led 'Make in India' initiative.
Manufacturing and engineering follow closely with an increase from 8% to 9.7%, reflecting a resurgence in the manufacturing ecosystem.
More than 1,550 companies in India participated in the survey, spanning diverse industries, such as technology, life sciences, consumer goods, financial services, manufacturing, automotive, and engineering.
Further, the report revealed that in 2025, 37% of organisations plan to increase their headcount reflecting India's vibrant talent demand across diverse sectors.
Voluntary attrition is expected to stabilise at 11.9%, with Agriculture and Chemical (13.6%) and Shared Services Organisations (13%) experiencing the highest rates, indicating a competitive talent market.
It is also expected that this year some organisations will focus on strategic recruitment, competitive compensation, upskilling, and employee engagement to attract talent, reduce turnover, and sustain growth to address workforce demands.
"India's talent landscape is experiencing a remarkable transformation. Pay premiums are also reshaping the workforce, additionally, the increased adoption of performance-linked pay plans by more than 75% of organisations, signifies a holistic shift towards performance orientation, both in the short term and long term."
"Companies that prioritise these trends will be better positioned to attract and retain talent in a competitive market," Mercer's India Careers Leader Mansee Singhal said.
