Average pay hike in India: Average salary hikes in Indian companies are projected to come down to 8.8 per cent in 2025, as compared to 9 per cent in 2024 amid companies trying to navigate global and local headwinds.
As per a survey conducted by Deloitte, there is a “clear focus” on optimising compensation cost budgets in 2025, which is likely to result in lower salary hikes.
The audit firm said this average India increment is expected to be the lowest in a decade, excluding 2020–2021.
The Deloitte India Talent Outlook 2025 survey shows that 75 per cent of companies will either reduce or keep their pay increases the same as last year.
Consumer sector expects lower pay hikes
The report also highlighted that while most sectors will keep the increment growth stable or moderately lesser than the previous year, the consumer products sector expects a significantly lower increment budget.
Notably, the consumer sector was hit hard due to the economic slowdown that prompted Indians to buy less. The results were reflected in quarterly earnings, with major firms reporting dips in their profits, revenues and other parameters.
Who will get the most pay hike?
The report says that organisations have continued to remain focussed on retaining key talent. “Top performers can expect a 1.7x higher increment than average performers, which is moderately lower than last year,” it said.
“Employees at individual contributor and junior management levels can expect a 1.3x higher increment than the top management level,” the report added.
Promotions and attritions
While a third of the participating companies expected to make lower promotions than last year, the overall percentage of employees receiving promotions is projected to remain steady at around 12 per cent.
Most companies expect to not increase their promotion-linked pay increases compared with previous years, as per the survey.
Attrition in 2024 has moderated to 17.4 per cent, it said.
However, companies across sectors and sizes are still optimistic about hiring, and almost 80 per cent of companies plan to increase headcount in the coming financial year.
