Pay hikes at 15-year low, 2026 may not be far better either

Rising adoption of AI, tariff wars, and global economic uncertainty have slowed pay growth

- devina.sengupta@livemintcom

India Inc has handed out the lowest pay hike in almost 15 years, excluding the pandemic year of 2020. This signals a mellowing of India’s job market with prospects not looking brighter for the coming appraisals, too.

Consulting firms have also flagged that retrenchments on the back of adoption of artificial intelligence (AI), tariff wars and global economic uncertainty have hit a five-year high this year.

“The increments that we had projected were early on in the year, around February-March. That was before the impact of tariffs and volatile uncertainty... We were expecting the number to be a little lower than what they projected. But that it has fallen below 9% is remarkable. I think 0.1-0.2% fall is usually the case when there is a little bit of change in the uncertainty. It has fallen by 0.3% means that during March-May, when most (companies) give increments, there was a lot of caution, plateauing down of expectations and rationalizing budgets,” Roopank Chaudhary, partner and rewards consulting leader at Aon, told Mint.