Salary hikes in India to reach 9.2% in 2025, with engineering and automotive sectors leading, while attrition rates decline, indicating workforce stability
Chennai: Salaries across sectors are set to rise by 9.2 per cent in 2025, in a declining trend amidst global uncertainty and softening growth. Attrition rates too are showing a declining trend, indicating stability in talent availability.
Salaries are set to rise by 9.2 per cent in 2025, a slight decline from the increase of 9.3 per cent in 2024, amidst global uncertainty and softening growth. This indicates a trend of declining salary increments since 2022 when companies provided 10.6 per cent salary increase, according to Aon.
Engineering design Services and Automotive sector are expected to offer the highest salary increase of 10.2 per cent, followed by NBFCs at 10 per cent. Retail too is expected to see a 9.8 per cent salary increase, followed by Global Capability Centres, engineering and manufacturing and real estate and infrastructure at 9.7 per cent.
“Despite external uncertainties, India’s economic prospects remain stable, with rural demand improving and private consumption maintaining momentum. The downward trend in projected salary increases could be in response to external factors like the geopolitical and economic developments, the potential impact of US trade policies, conflict in the Middle East and the explosive pace of generative AI advancements,” said Roopank Chaudhary, partner and rewards consulting leader for Talent Solutions for India at Aon.
The study also reveals that overall attrition rates declined to 17.7 per cent in 2024 from a high of 18.7 per cent in 2023 and 21.4 per cent in 2022, indicating the availability of a larger talent pool. This stability in talent availability is an outcome of increased labour force participation despite a rise in self-employment and entrepreneurial activity, which presents an opportune time for companies to focus on strategic workforce skilling, reskilling and institutional support.
