Salaries in India are projected to rise by 9.5% in 2025, compared to the 9.3% increase seen this year, according to a recent report released on October 3.

Engineering, manufacturing, and retail industries are expected to see double-digit salary growth of 10%, closely followed by financial institutions at 9.9%. These sectors highlight the strategic importance employers place on talent in today's economic environment.

Global capability centers (GCCs), as well as technology product and platform industries, anticipate salary hikes of 9.9% and 9.3%, respectively. In contrast, the technology consulting and services sectors project more modest increments at 8.1%.

A significant reduction in employee attrition has been observed, with the rate dropping to 16.9% this year, down from 18.7% in 2023 and 21.4% in 2022.

Despite global economic challenges, the report reflects a positive business outlook across several sectors in India, especially in manufacturing, life sciences, and retail. Roopank Chaudhary, partner and head of reward solutions in India, noted that companies must stay updated on evolving compensation trends to retain talent in a competitive job market.

The study, which analyzed data from over 1,176 companies across 40 industries between July and August, emphasized the importance of a data-driven rewards strategy to attract and retain the right talent, ensuring a resilient workforce.

Tarun Sharma, associate director for talent solutions, added that the current decline in attrition offers businesses an opportunity to focus on internal growth, capability building, and long-term productivity.

Phase two of the study, with additional data collected in December and January, will be published in early 2025.

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