Indian corporates expected to maintain 9.5% salary increase in 2025, finds survey

Corporate India is anticipated to provide a salary hike of 9.5 percent in 2025, aligning with the actual salary increment observed in 2024. According to the latest Salary Budget Planning Report by WTW, this is in line with the actual salary growth seen in 2024. This projected increase reflects a strategic balance of optimism and caution, as per the report released on Tuesday.

The report predicted a median salary hike of 9.5 percent for India in 2025, matching the 9.5 percent uptick witnessed in the previous year. India continues to lead in salary increments within the region, with other markets like Vietnam (7.6 percent), Indonesia (6.5 percent), the Philippines (5.6 percent), China (5 percent), and Thailand (5 percent) also expected to see significant salary growth in the upcoming year.

The report analysed at a range of job grades across various industry sectors and summarised the findings of WTW’s survey on salary movement and reviews HR
practices as a means of helping companies with their compensation planning for 2025 and beyond.

Year Projected salary increase Actual salary increase
2025 9.5% -
2024 9.8% 9.5%
2023 9.8% 10.0%
2022 9.3% 9.8%
2021 7.0% 8.5%

Source: WTW 2024 Salary Budget Planning Survey Report – India

According to projections for 2025, salary increases in various industries are expected to exceed the general industry median of 9.5 per cent. Sectors such as Pharmaceuticals (+10 per cent), Manufacturing (+9.9 per cent), Insurance (+9.7 per cent), Captives and SSO sectors (+9.7 per cent), and Retail (+9.6 per cent) are anticipated to experience salary increases above the industry average. On the other hand, software and Business Services are projected to have salary increases of 9 per cent, falling below the general industry median.

"While companies in India are optimistic about growth, they are balancing optimism with caution. The era of 'Great resignation' is behind us, both employers and employees are now seeking stability and the market sentiment is notably steadier," Rajul Mathur, Consulting Leader, Work and Rewards, WTW India said.

“India’s captive sector is thriving, with a forecasted jump from around 1,500 captives in 2023 to 2,000 by 2025. As the home to nearly half of the world's global capability centers, the country's rich pool of skilled talent is driving innovation and boosting projected salary increases," added Mathur.

Variable payouts in 2025

In 2025, it is anticipated that variable payouts will continue to hold steady at 12.5%, following the previous year's rate of 12.6%. As businesses focus on enhancing performance, they are allocating larger portions of their variable pay budgets to top performers and those above average, ensuring that talent is recognized and appropriately rewarded.

"There is a growing emphasis on performance-based pay differentiation within organizations. This shift means that top performers have the potential to receive salary increases three times higher than average performers, while above-average performers may see an increment 1.2 times that of an average performer," as stated by Mathur.

Recruitment in 2025

Regarding recruitment, around 28% of companies are planning to hire new employees in the upcoming year. Additionally, 68% of companies intend to maintain their current headcount in 2025 compared to the previous year.

With higher growth rates anticipated, India's voluntary attrition rate continues to be one of the highest in the region. However, it is observed that the
voluntary attrition rates in India have reduced slightly from 11% in 2023 to 10.8% in 2024.