Salaries in India may grow by 9.5% in 2025, predicts Aon survey

Salaries in India will grow by 9.5 per cent in 2025, predicts a survey report by the global professional services company Aon. The survey also notes that Attrition Rate, or the rate at which employees leave an organisation voluntarily or involuntarily, has been on the decline in India since 2022.

While on salaries, the survey says that growth registered in 2025 would be slightly more than the 2024 figure of 9.3 per cent. Engineering and manufacturing are the sectors that will witness highest increase in salaries, besides financial institutions and global capability centres (GCCs), the survey adds.

ENGINEERING, MANUFACTURING COULD LEAD THE WAY

Sectors expected to see the best salary hikes are engineering, manufacturing and retail, a surge in demand for skilled professionals in these sectors will drive salary raises of as much as 10 per cent. Financial institutions and GCCs could see salaries rise by 9.9 per cent, while Firms in the Fast-Moving Consumer Goods (FMCG) industry are expected to hike salaries at around 9.5 per cent,

Tech hubs are likely to see hikes of around 9.3 per cent. The hike in salaries for professionals associated with technology consulting and services will be around 8.1 per cent, the survey predicts.

ATTRITION RATE ON THE DECLINE

Attrition Rate has been on the decline in India, the survey notes. It was 21.4 per cent in 2022, 18.7 per cent in 2023 and 16.9 per cent in 2024, and is expected to continue falling.

The positive side of attrition is the trend lets companies nurture the growth of internal talent and helps augment efforts to retain existing staff, in the process increase long-term productivity. Developing and nurturing internal talent also helps companies avoid bearing additional costs of hiring expensive new professionals.

Currently, Attrition Rate is least in the engineering and manufacturing sector at 12.2 per cent, lower than the overall average. Financial institutions have a high Attrition Rate of 27.3 per cent, highlighting that employers continue facing problems in retaining staff. Professional services, battling an Attrition Rate of 22.1 per cent in 2024, is projected to hike salaries by 9.7 per cent on an average next year. For FMCG firms, Attrition Rate could be steady at 15.5 per cent.

The survey marks the first phase of Aon’s 30th Annual Salary Increase and Turnover Survey for 2024-25 and has been conducted in 176 companies across 40 industries. The second phase of the survey will feature data of December and January, and will be released early next year.