Corporate India Expected to Maintain Salary Growth at 9.5% in 2025: Study | the news

The Salary Budget Planning Report is prepared by WTW's Salary Data Analysis Department. The study was conducted in April and June 2024. Approximately 32,000 responses were received from companies in 168 countries around the world. The study involved 709 participants from India.

“While companies in India are optimistic about growth, they are balancing optimism with caution. The era of the 'Great Churn' is behind us, both employers and employees are now looking for stability and the market sentiment is extremely stable,” Rajul Mathur, Advisory Leader, Work & Rewards, stated WTW India.

In 2025, wages are expected to increase in industries such as pharmaceuticals (10%), manufacturing (9.9%), insurance (9.7%), captive and SSO sectors (9.7%). and retail trade (9.6%). General industry salaries will be above the median, while business software and services are expected to be below the overall industry median of 9.5% at 9%.

“India's captive sector is booming and is projected to grow from around 1,500 prisoners in 2023 to 2,000 in 2025. The country is home to almost half of the world's centers of competence, and its rich pool of skilled talent is driving innovation and wage growth projects,” he added . Mathur.

Variable pay is expected to remain flat at 12.5% ​​in 2025, compared to 12.6% in 2024. As organizations prioritize performance, they allocate a large portion of their budgets to variable pay for top and above-performing employees. so that talents are recognized and rewarded appropriately.

“Organizations place great emphasis on performance-based pay differentiation. “This trend shows that top workers will potentially receive three times the raise of average workers, while average workers are expected to receive approximately 1.2 times the raise of average workers.” Doctor Mathur.

In terms of employment, approximately 28 percent companies plan to increase employment in the next 12 months, and 68 percent companies plan to maintain employment in 2025 compared to the previous year.

Given the expected high growth rates, India's rate of population loss will be among the highest in the region. However, India's voluntary quit rate has been observed to have declined slightly from 11% in 2023 to 10.8% in 2024.

Additionally, about 46 percent of companies in India expect their 2025 wage increase budgets to be similar to those for 2024, while 28 percent believe budgets may be lower than forecast.

According to the report, the main factors influencing budget forecasts for 2025 are cost management concerns, inflationary pressures, an expected recession and a tight labor market.