WAGES IN A CRUNCH

SALARIED EMPLOYEES HAVE BEEN FACING AN UPHILL BATTLE FOR THE LAST FEW YEARS WITH MOST SEEING SUBDUED HIKES EVEN AS INDIA INC'S PROFITS SURGED. WILL PAYCHECKS BLOOM THIS YEAR?

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MID TO LATE single digits. That's the consensus estimate of salary increments in 2025 among HR and staffing firms. The reasons: Global economic uncertainties and fears of a possible recession in the US.

“As Indian companies navigate global and local headwinds, there is a clear focus on optimising compensation budgets, with pay increases for 2025 being forecast at 8.8% (9% in 2024). The survey shows that 75% companies will either reduce or keep their pay increases the same as last year,” says the third edition of the Deloitte India Talent Outlook 2025, noting that the average increment is expected to be the lowest in a decade, barring 2020-21.

Aon’s Annual Salary Increase and Turnover Survey 2024-25 India says salaries in India are set to rise by 9.2% in 2025, a slight decline from 9.3% in 2024, amid global uncertainty and softening growth. With artificial intelligence (AI) taking over some jobs, experts caution that increments may remain muted for several sectors even in 2026. This comes at a time when the government is looking to spark a virtuous cycle of increased consumer spending with cuts in income tax rates in Union Budget 2025-26.

Neeti Sharma, CEO of staffing solutions firm Teamlease Digital, says projections of salary increments for this year are not very promising but vary from sector to sector. “Everyone’s talking about a 7-9% growth rate,” she tells BT. Since IT services firms have faced some headwinds, increments in the industry will not be very large. However, for certain skill sets such as AI, they could be 12-16%. The BFSI (banking, financial services and insurance) sector may see single-digit increments.