Average salary increment in India to dip to 8.8% in 2025: Deloitte
According to Deloitte's outlook, top performers can expect a 1.7x higher increment than average performers
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Companies are likely to offer lower raises in 2025 compared to last year, according to the Deloitte India Talent Outlook report.
Despite global and local challenges, the average India increment is expected to be 8.8 percent in 2025 compared to 9 percent in 2024.
The survey observed that 75 percent of the companies plan to either reduce or maintain their increment at last year's level. Most sectors expect stable or moderately lower increments, but the consumer products sector anticipates a reduced incremental budget.
According to Deloitte's outlook, top performers can expect a 1.7x higher increment than average performers. In contrast, employees at individual contributor and junior management levels can expect a 1.3x higher increment than the top management level.
The percentage of employees receiving promotions is expected to remain stable at 12 percent, with the majority of firms not planning to increase their promotion-linked pay hikes in 2025.
Deloitte's survey also revealed that almost 80 percent of companies plan to increase headcount in the coming financial year amid a stable attrition rate.
The percentage of organisations planning to reduce headcount has declined by 50 percent since 2024. Interestingly, 89 percent of Indian firms in financial services, 88 percent in manufacturing, and 82 percent in the consumer product sector have planned to increase their headcount in 2025.
“In an environment where companies are witnessing muted revenue growth, compensation budgets are naturally coming under pressure. Controlled attrition and moderate inflation are helping companies optimize pay increases without adversely affecting talent outcomes. However, we expect the focus on performance and talent differentiation to remain core to the HR strategies, regardless of other considerations," Prakhar Tripathi, Partner, Deloitte India, said.
Additionally, companies are investing more in training and development, recognizing that employees need critical skills to advance in their careers.
India Inc is currently spending Rs 9,700 per employee on training, with one in three companies spending less than Rs 5,000.
However, learning budgets are expected to grow by only about 3 percent in the next year, due to budget constraints.
