Salaries in India are expected to increase by 9.5% in 2024, slightly lower than the actual increase of 9.7% in 2023, largely in response to market dynamics, according to global professional services firm Aon plc.
According to the firm's annual salary increase and turnover survey 2023-24 India, that analysed data across 1,414 companies from almost 45 industries, salary increase in India seems to have stabilised at high single digits, after the post-pandemic high increments in 2022.
"The projected increase in salaries in the Indian formal sector indicates a strategic adjustment in response to the evolving economic landscape. Despite a conservative global sentiment, industries such as infrastructure and manufacturing continue to project robust growth, indicating the need for targeted investments in certain sectors," said Roopank Chaudhary, partner and chief commercial officer for Talent Solutions at Aon in India.
India continues to roll out the highest salary increases amongst the major economies amidst geopolitical tensions, followed by Bangladesh, and Indonesia with 7.3% and 6.5% average salary increases in 2024.
The survey revealed that the overall attrition rates fell from 21.4% in 2022 to 18.7% in 2023. This highlights a job market that remains competitive and that turnover rates may have reached their peak.
A decrease in attrition is favourable for organisations allowing them to direct resources towards improving capability and enhancing productivity, thereby creating a positive cycle, the survey said.
"In 2023, organisations navigated a challenging environment, balancing a generous average salary increment amidst high attrition rates. As leaders prepare for 2024, their focus is likely to shift towards building a supportive work environment to foster employee engagement in a dynamic job market," said Jang Bahadur Singh, director for Talent Solutions at Aon in India.
Sector-wise, financial institutions, engineering, automotive, and life sciences are likely to offer the highest salary increases, while retail and technology consulting and services will see the lowest salary hikes.
The survey further noted that the world today continues to grapple with short-term risks like economic uncertainty and conflicts that threaten to escalate.
Moreover, the global workforce is at the cusp of possibly the greatest disruption in the form of the impact of AI/ML. Talent professionals will need to curate people strategies that will help build resilience and agility.
They need to respond to changing business dynamics and revamp talent supply to match changing demand patterns, the survey said.
On the Indian workforce, Aon said, "India has a unique proposition of scale and capability for the globe and early signs indicate it will be at the forefront of the next wave of AI/ML-led disruption."
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