The salary increase forecast for 2025 is likely to get lower in India where pay hikes could average at 8.8% as predicted by the latest report from Deloitte. Its figure represents a slight decrease from the average increase of 9.1% the previous year. The report brings before the reader crucial trends and factors affecting salary growth across different sectors.
Reasons For The Decline
- Uncertain Economy: Perturbed by the inflation and global concerns arising from geopolitical instability, a majority of companies are thus cautious about increasing salaries.
- Cost Saving: Moderate employee pay hikes for the organizations have emanated from concentrating more on cost-saving measures.
- Industry to Industry Differentiation: Competitive pay hikes may be offered by certain sectors like technology and e-commerce while manufacturing and infrastructure sectors may have low increases.
- Talent Stability: Even though it reduces overall pay hikes, companies are expected to give performance-centric bonuses and µ targeted salary increases to retain critical talent.
Sector-wise Pay Hike Projections
- Technology and IT Services: Due to an ongoing demand for digital transformation and tech talent, this sector is expected to maintain relatively higher increments at around 10 percent.
- Financial Services: Expected salary increases of around 9 percent to be driven by competition in the department to attract talented people in the finance sector.
- Manufacturing and Infrastructure: Generally expected to achieve lower increments ranging between 7 and 8 percent due to the increase in companies focusing on efficiency.
- Retail and E-commerce: Given the improvement in consumer spending, increments here could be expected to hover around 9.5%.
Employee Expectations And Company Responses
As indicated in the Deloitte report, employees have lofty expectations even as pay rises are forecast to dip. Companies are replacing monetary incentives with non-monetary options, flexible work arrangements, opportunities for upskilling, or career pathways for retention purposes.
More so, performance-linked salary increases may become a standard practice where high performers are adequately rewarded.
Conclusion
Slower growth is clear with a projected pay increase of 8.8% in 2025, but healthy growth remains relative to the world. Employees can expect moderate pay rises but will have enhanced chances of making money through bonuses awarded for performance and promotions. As companies face challenges during this period, a balanced approach to compensation and talent management would thus be valuable in maintaining employee morale and productivity in well often tight times.
However, stay abreast with more reports and insights to know how the changes in employment happen in the upcoming months.
Also Read: Unified Pension Scheme 2025: Check Benefits, Features And Eligibility Now