As the year draws to a close, employees across various sectors are filled with anticipation for their annual salary increments. According to a recent survey by Aon PLC, the outlook for salary increases in 2025 is optimistic, promising better compensation for workers.

The survey indicates that the average salary in India is expected to rise by approximately 9.5% in 2025, following a slight decline to an anticipated increase of 9.3% in 2024. This upward trend is attributed to a positive business environment across multiple sectors.

Sector-Specific Salary Increases

The report highlights significant salary growth expectations in several key sectors:

Engineering, Manufacturing, and Retail: Anticipated salary increases of around 10%.

Financial Institutions and Global Capability Centers: Projected increments of 9.9%.

Technical Production: Expected salary growth of 9.3%.

Service Sector: Forecasted increases around 8.1%.

Experts note that despite global economic challenges, India’s dynamic market conditions continue to foster growth in various sectors, notably manufacturing, biosciences, and retail.

Economic Factors Driving Salary Growth

India’s rapidly growing economy is fueling demand for skilled professionals, prompting companies to offer higher salaries to attract and retain talent. Additionally, the rising cost of living is a critical factor contributing to the need for higher wages.

As per the findings, competition in the job market is forcing companies to adapt their strategies based on changing economic data. Notably, the employee attrition rate has declined, with an average of 16.9% of employees leaving their jobs this year, compared to 18.7% in 2023 and 21.4% in 2022. This decrease provides organizations an opportunity to focus on internal growth and productivity enhancement.

Aon’s survey, based on data from over 1,176 companies across 40 industries, underscores a positive trend in salary increments for 2025. As businesses navigate the competitive landscape, the expectation of higher salaries reflects not only the growth potential in various sectors but also the ongoing need for companies to invest in their workforce to ensure stability and success in the evolving market.