Corporate India Sees Bright Future with Projected 9.5% Salary Increase for 2025
A report released on Tuesday suggests that companies in India may provide their employees with a 9.5% salary increase in 2025, which aligns with the actual salary growth observed this year. According to WTW’s latest Salary Budget Planning Report, the average salary increase in India is expected to remain at 9.5% in 2025, consistent with the 9.5% increase recorded in 2024. Sector-wise projections for next year indicate that the pharmaceuticals sector may see a 10% salary increase, followed by manufacturing at 9.9%, insurance at 9.7%, and retail at 9.6%. However, salary growth in the software and business services sectors is anticipated to be lower, at 9%, which falls below the overall industry average of 9.5%.
A report indicates that India’s corporate sector is at the forefront of salary growth in the Asia-Pacific region, with a projected increase of 9.5%. This places India ahead of several countries, including Vietnam at 7.6%, Indonesia at 6.5%, the Philippines at 5.6%, China at 5%, and Thailand at 5%. The findings are based on data collected by WTW’s Rewards Data Intelligence, with the survey conducted between April and June 2024, gathering around 32,000 responses from companies across 168 countries, including 709 from India.
Rajul Mathur, Consulting Head (Work & Rewards) at WTW India, noted that Indian companies are optimistic about salary growth but are also exercising caution. He mentioned that the wave of mass resignations has diminished, leading both employers and employees to prioritize stability. Market sentiment has stabilized significantly. Mathur also highlighted that organizations are increasingly focusing on performance-based pay differentiation. In this context, top performers may receive salary increases that are three times greater than those of average performers, while above-average performers could see increases of 1.2 times the amount given to average performers.
A report indicates that about 28% of companies are looking to hire new employees in the next year, even though voluntary turnover rates in the sector remain high. India’s employee turnover rate has slightly decreased to 10.8% in 2024 from 11% in 2023.
Additionally, 46% of Indian companies expect their salary increase budget for 2025 to stay the same as it was in 2024, while 28% anticipate that their budget will be lower than expected.