India Inc poised to see average salary hike of 9.4% in 2025

India Inc is set to witness an average salary increase of 9.4 per cent in 2025, a slight moderation from the 9.6 per cent recorded in 2024, according to EY Future of Pay report.

The report showed that as many as six in 10 Indian employers are keen to explore the potential of AI for employee rewards and compensation strategies over the next three years.

"The report reveals that India Inc is set to witness an average salary increase of 9.4 per cent in 2025, a slight moderation from the 9.6 per cent recorded in 2024. Overall employee attrition rate dropped from 18.3 per cent in 2023 to 17.5 per cent in 2024," it said.

Nearly 60 per cent employers are looking to leverage AI across critical areas such as salary benchmarking, real-time pay equity analysis, and customisable benefits for employees.

The report noted that firms are poised to transition from manual pay benchmarking and fixed incentive models to AI-driven predictive analytics and real-time salary adjustments by 2028.

"With AI-powered compensation platforms, companies can now personalise benefits, optimise reward structures, and ensure pay equity across diverse workforce demographics," the report said.

Also blockchain and smart contracts are emerging as key enablers of secure, transparent and automated payroll processing, particularly for cross-border compensation.

As per the report findings, the e-commerce sector is expected to see the highest salary increment of 10.5 per cent in 2025, driven by the rapid expansion of digital commerce, rising consumer spending, and technological advancements.