New Delhi, 15 October 2024 — The median salary increase in India is forecasted to rise by 9.5% 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 (NASDAQ: WTW), a leading 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
| Year | Projected salary increase | Actual salary increase |
|---|---|---|
| 2025 | 9.5% | - |
| 2024 | 9.8% | 9.5% |
| 2023 | 9.8% | 10.0% |
| 2022 | 9.3% | 9.8% |
| 2021 | 7.0% | 8.5% |
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.
In addition, around 46% of companies in India project 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.
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.
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.”
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 projected 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.
“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.
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.
“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.
“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.”
Rajul Mathur | Consulting Leader, Work and Rewards, WTW India
The Salary Budget Planning Report is compiled by WTW’s Rewards Data Intelligence practice. The survey was conducted in April and June 2024. Approximately 32,000 responses were received from companies across 168 countries worldwide. The survey had 709 participants from India.
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