NEW DELHI: Employees in India can look forward to a significant increase in their salaries in 2025, with an average forecasted rise of 9.4 per cent, according to a total remuneration survey (TRS) by HR consulting firm Mercer.
This follows a period of slow growth over the past five years, during which salaries increased by 8 per cent in 2020.
The anticipated salary hike is driven by robust economic growth and a strong demand for skilled talent, as revealed by the survey. The automotive sector is expected to lead this increase, projecting a 10 per cent rise, up from 8.8 per cent, fueled by the growth of electric vehicles and the government’s ‘Make in India’ initiative.
Following closely are the manufacturing and engineering sectors, which are expected to see salary increases rise from 8 per cent to 9.7 per cent, reflecting ongoing recovery within the manufacturing ecosystem.
Voluntary attrition
Amid the competitive talent market, voluntary attrition is also expected to stabilise at 11.9 per cent, with sectors like agriculture and chemical at 13.6 per cent, shared services organisations at 13 per cent, seeing the highest rates.
Demand for workforce
The survey revealed that the year 2025 highlights a growing demand for talent in India as 37 per cent of organisations are planning to expand their workforce.
To address workforce demands and sustain growth, many companies are likely to focus on strategic recruitment, competitive compensation, upskilling, and employee engagement to attract and retain talent while reducing turnover.
Mercer’s India careers leader, Mansee Singhal, told news agency PTI, “India’s talent landscape is experiencing a remarkable transformation. Pay premiums are also reshaping the workforce, additionally, the increased adoption of performance-linked pay plans by more than 75 per cent of organisations, signifies a holistic shift towards performance orientation, both in the short term and long term.”
He added that companies that focus on these trends will be in a stronger position to attract and retain talent in an increasingly competitive market.
The survey included responses from over 1,550 companies across industries such as technology, life sciences, consumer goods, financial services, manufacturing, automotive, and engineering.
