India Inc. is set to witness an average salary increase of 9.4% in 2025, a slight moderation from the 9.6% recorded in 2024, according to EY Future of Pay report.
The report showed that as many as six in 10 Indian employers are keen to explore the potential of AI for employee rewards and compensation strategies over the next three years.
-
Indian Markets Turning Corner After Two Tough Years, Says Sandeep Tandon -
NDTV Profit Ignite 2026: Experts See Opportunity In Equities, Stay Bullish For Long-Term -
Buy Right, Sit Tight Does Not Work for Individual Stocks, Says Dinshaw Irani -
'Worst Is Behind': Quant MF Sees Market Bottom, Flags 'Extreme Euphoria' In Midcaps -
India's Mutual Fund Industry Could Become A $1 Trillion Opportunity, Say Fund Managers -
'Foreign Investors Are Baraatis': Raamdeo Agrawal's Take On LTCG Tax -
Stay Invested Through Market Cycles: Raamdeo Agrawal at NDTV Profit Ignite -
Ramesh Damani Remains Bullish On India For Next 20-30 Years, Sees Bargains Amid Market Weakness -
CAS Came After A Long Consultation Process: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFIT IGNITE -
Aim To Cut FPI Onboarding Time From Mth To Five Days: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFI
"The report reveals that India Inc. is set to witness an average salary increase of 9.4% in 2025, a slight moderation from the 9.6% recorded in 2024. Overall employee attrition rate dropped from 18.3% in 2023 to 17.5% in 2024," it said.
Nearly 60% employers are looking to leverage AI across critical areas such as salary benchmarking, real-time pay equity analysis, and customisable benefits for employees.
The report noted that firms are poised to transition from manual pay benchmarking and fixed incentive models to AI-driven predictive analytics and real-time salary adjustments by 2028.
"With AI-powered compensation platforms, companies can now personalise benefits, optimise reward structures, and ensure pay equity across diverse workforce demographics," the report said.
Also blockchain and smart contracts are emerging as key enablers of secure, transparent, and automated payroll processing, particularly for cross-border compensation.
According to the report findings, the e-commerce sector is expected to see the highest salary increment of 10.5% in 2025, driven by the rapid expansion of digital commerce, rising consumer spending, and technological advancements.
The financial services sector follows closely, with projected salary increment of 10.3% in 2025, driven by demand for fintech specialists, digital banking experts, and cybersecurity professionals.
The report also highlights salary increments in Global Capability Centres, projected at 10.2% in 2025, up from 10% in 2024, as companies continue investing in digital transformation and automation.
However, IT and IT-enabled services sectors are experiencing a slowdown in salary growth, impacted by automation, cost optimisation, and hiring slowdowns, it showed.
IT sector salary increments are expected to decline from 9.8% in 2024 to 9.6% in 2025, while IT-enabled services will see a moderation from 9.2% in 2024 to 9% in 2025, underscoring a strategic shift towards efficiency and leaner workforce structures.
Meanwhile, automotive, pharmaceuticals, and manufacturing sectors continue to display steady compensation trends, it said.
According to the report, Chief Executive Officers' pay in Nifty50 companies surged by 18-20% from 2023 to 2024, reflecting a significant increase in executive compensation.
Notably, promoter CEOs earn 30-40% more than professional CEOs, with an increasing preference for internal promotions, as 40-45% of CEO transitions in the past five years were internal.
"The report highlights that 70% of CEO compensation is performance-linked, with incentives tied to business growth, ESG (Environmental, Social, and Governance) goals, and long-term sustainability," it said.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.