India To Maintain 9.5% Salary Increase In 2025, Finds WTW Survey

India Inc is projected to pay out a median salary increase of 9.5% in 2025, equal to the actual hikes in 2024, the latest Salary Budget Planning Report by advisory, broking, and solutions company WTW has found.

The projected salary increases in India continue to be the highest across the Asia-Pacific region with markets such as Vietnam (7.6%), Indonesia (6.5%), the Philippines (5.6%), China (5%) and Thailand (5%) also poised to maintain a strong salary increase for next year.

Salary increases across industries such as pharmaceuticals (10%), manufacturing (9.9%), insurance (9.7%), captives and shared services and outsourcing sectors (9.7%) and retail (9.6%) are likely to be above the general industry salary median of 9.5% for 2025, whereas software and business services at 9% are projected below the general industry median.

Around 46% of companies in India expect that their salary increase budgets for 2025 will be similar to 2024, while 28% say the budgets are likely to be lower than projected. Around 12% said there would be no change while the balance was yet to decide/unsure.

Concerns related to cost management (41.7%), inflationary pressures (37.5%), anticipated recession (33.3%) and a tighter labour market (31.3%) are the major factors influencing budget projections for 2025.

In terms of hiring, almost 28% of companies said that June onwards, they plan to add headcount in the next 12 months, while 68% companies will maintain their headcount as compared to the previous year.

“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 in a statement.

The survey found that variable payouts are projected to remain consistent at 12.5% in 2025, compared to 2024’s 12.6%. As organisations prioritise performance, they are assigning larger portions of their variable pay budgets to top and above-average performers, ensuring talent is recognised and suitably rewarded.

“Organisations are placing a stronger emphasis on performance-based pay differentiation. This trend sees top performers potentially earning salary increments three times that of average performers, while above-average performers are expected to receive about 1.2 times the increment of an average performer,” said Mathur.

The Salary Budget Planning Report is compiled by WTW’s Rewards Data Intelligence practice. The survey was conducted in April and June 2024. Approximately 32,000 responses were received from companies across 168 countries worldwide. The survey had 709 participants from India.

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