India To Maintain 9.5% Salary Increase In 2025: Survey

The median salary increase in India is forecasted to rise by 9.5 per cent in 2025, similar to the 2024 actual salary increase of 9.5%. That’s according to WTW’s latest Salary Budget Planning Report by WTW, a global advisory, broking, and solutions company.

The report looks at a range of job grades across various industry sectors and summarises 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.

Figure 1: Projected and actual salary increase for companies in India

Source: WTW 2024 Salary Budget Planning Survey Report – India 

Being an emerging market in Asia Pacific (APAC), salary increases in India continue to be the highest across the region. Markets such as Vietnam (7.6%), Indonesia (6.5%), the Philippines (5.6%), China (5%) and Thailand (5%) are also projected to maintain a strong salary increase for next year.

Figure 2: APAC salary increase rates 

In addition, around 46% of companies in India expect that their salary increase budgets for 2025 will be similar to 2024, while 28% say that the budgets are likely to be lower than projected. Concerns related to cost management, inflationary pressures, anticipated recession and a tighter labour market are the major factors influencing budget projections for 2025. 

Hiring and attrition rates in India

In terms of hiring, almost 28% of companies plan to add headcount in the next 12 months, while 68% companies will maintain their headcount in 2025 as 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.

Attrition trends in APAC

Rajul Mathur, Consulting Leader, Work and Rewards, WTW India said “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.”

Sectoral budgeted salary increase trends in India

Salary increases across industries such as the Pharmaceuticals (10%), Manufacturing (9.9%), Insurance (9.7%), Captives and SSO 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. 

Sector-wise budgeted salary increase trends in India

“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.

Projected variable payouts in India

In 2025, variable payouts are projected to remain consistent at 12.5%, following 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.

Salary increment budget allocation by performance rating

“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.