New Delhi — Salaries in India are projected to increase by an average of 9.1% in 2027, as companies continue investing in skilled workers while managing rising labor costs and global economic uncertainty, according to a new report from professional services firm Aon.
The forecast represents a slight increase from the average salary growth of 9% recorded in 2026, suggesting that employers expect compensation budgets to remain relatively stable despite economic challenges.
Aon’s Annual Salary Increase and Turnover Survey for India 2026-27 analyzed data from more than 1,200 organizations across 45 industries to assess compensation trends, employee turnover and workforce priorities.
The report found that strong domestic consumption, continued investment and export growth are supporting business confidence, allowing companies to maintain salary increases while keeping expenses under control.
Non-banking financial companies are expected to offer the largest salary increases in 2027, with projected raises averaging 10.1%. The energy sector follows at 9.9%, while real estate and infrastructure companies are expected to increase salaries by 9.8%.
Roopank Chaudhary, partner and rewards consulting leader for Talent Solutions India at Aon, said companies are becoming more selective about how they allocate compensation budgets.
“Strong domestic consumption, sustained investment and export growth continue to support business confidence, allowing employers to invest in talent while maintaining cost discipline,” Chaudhary said.
He added that employers are placing greater emphasis on retaining employees with specialized expertise and ensuring compensation remains competitive in industries facing talent shortages.
“Stable salary budgets are enabling a more targeted approach to pay. A modest rise in non-merit adjustments, particularly in manufacturing and technology, reflects greater focus on market alignment, scarce skills and critical talent,” he said.
Employee retention remains a growing concern for Indian businesses. The survey found that overall employee attrition increased to 18% in 2026, compared with 16.2% in 2025 and 17.1% in 2024.
The report also highlighted the accelerating adoption of artificial intelligence across Indian workplaces.
The proportion of companies with established use of AI productivity tools increased to 56% in 2026 from 46.1% the previous year, with adoption expanding across all major job categories included in the survey.
The findings suggest that employers are increasingly balancing investments in technology with the need to attract and retain workers who possess critical skills.
Amit Kumar Otwani, associate partner at Aon’s Talent Solutions India, also emphasized the importance of preparing for changes associated with India’s Wage Code.
He said companies must look beyond regulatory compliance and evaluate the broader implications for workforce management and compensation costs while clearly communicating changes to employees.
Overall, the survey indicates that Indian employers expect to maintain steady salary growth in 2027, even as rising employee turnover, evolving skill requirements and increased use of artificial intelligence reshape the labor market. (Source: IANS)
