How Much Salary Increment You Can Expect In 2025? Aon Survey Reveals

The Annual Salary Increase and Turnover Survey 2024-25 by Aon plc revealed India’s salary hikes are expected to stabilize at 9.2 per cent in 2025, slightly lower than the 9.3 per cent increase in 2024. The survey depicts a comprehensive study on employee compensation in India, analysing data from over 1,400 companies across 45 industries.

Despite external obstacles such as geopolitical tensions and the rapid expansion of artificial intelligence AI, India's economic outlook is steady, with factors such as increased rural demand and continued private consumption driving growth. According to the report, compensation gains may vary across industries, with the largest increases in engineering design services and auto/vehicle manufacturing. Other industries, such as non-banking financial businesses (NBFCs), retail, global capability centres (GCCs), and life sciences, will also experience significant increases, but at a slightly slower rate.

While salary increases are expected to remain robust, companies will face market challenges due to shifting global dynamics. Geopolitical issues, such as tensions in the Middle East, changing U.S. trade policies, and the rapid growth of generative artificial intelligence AI, could affect salary structures and force businesses to adjust their compensation strategies.

Attrition rate

Another significant result from the survey is the decrease in attrition rates. Employee turnover, which had been increasing since COVID, declined for the third consecutive year to 17.7 per cent in 2024 from 18.7 per cent in 2023 and a higher 21.4 per cent in 2022. This shows that organizations are successfully tackling the issues posed by the Great Resignation. Although the rise of self-employment and entrepreneurship continues, the survey found that total labour force participation has grown. This gives organizations a bigger pool of talent to draw from, allowing them to spend more on skilling, re-skilling, and up-skilling.

Positive Outlook On The Job Market

Aon experts point out that knowing worker behaviour and economic trends is now more important than ever. Companies are better positioned to manage adjustments in talent and compensation expectations as data-driven analysis and advanced technology become more dominant. Businesses are employing these technologies to remain competitive in an ever-changing labour market.

According to the survey, the Indian employment market is becoming more secure and organized, with employers focusing on long-term employee retention and growth. As India continues to recover and grow in the wake of the pandemic, these trends indicate a positive outlook for both employers and employees.

This year’s survey serves as a valuable resource for businesses to make informed decisions on salary planning and talent management strategies, helping them navigate a complex and dynamic market.