Indian companies project 9.4% salary hikes in 2025 as talent war heats up

Indian employees are likely to increase salaries and undertake hiring sprees in 2025. Data gathered by Mercer projected a 9.4% overall salary increase across industries this year amid a growing demand for skilled talent. The survey — which polled more than 1550 companies in India — also found that 37% of organizations plan to increase their headcount in 2025.

According to the Total Remuneration Survey released by Mercer, salary increments have increased steadily over the past five years — going from 8% in 2020 to a projected 9.4% in 2025.

The surge is led by the automotive sector which anticipates increments of 10% this year. This is followed by the manufacturing and engineering segments which is projected to have increments rise from 8% to 9.7% in 2025.

The survey also found that 37% of organisations plan to increase their headcount this year — with voluntary attrition likely to stabilise at 11.9%. Mant organisations are also expected to focus on ‘strategic recruitment, competitive compensation, upskilling, and employee engagement’ in order to attract talent and reduce turnover.

More than 1550 companies in India — across a variety of industries — participated in the survey. The report also took recent technological changes and the advent of Artificial Intelligence into account as it studied the Indian talent landscape. India has also undergone a digital transformation in recent years — with the Make in India initiative giving a massive impetus to various industries.

“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% of organisations, signifies a holistic shift towards performance orientation, both in the short term and long term. Companies that prioritise these trends will be better positioned to attract and retain talent in a competitive market,” the report quoted Mercer’s India Careers Leader Mansee Singhal as saying.