FILE PHOTO: India Inc is expected to grow salaries by 9.1 percent in 2027, with NBFCs, energy and real estate driving salary growth, according to Aon. | Photo Credit: iStockphoto
India Inc is expected to increase salaries by an average of 9.1 percent in 2027, from 9 percent in 2026, according to the latest estimates released by Aon Inc, reflecting resilience in compensation budgets despite geopolitical uncertainty. Non-bank financial companies are expected to lead salary growth in 2027 at 10.1 percent, followed by energy at 9.9 percent and real estate and infrastructure at 9.8 percent.
Aon’s annual Salary Increase and Turnover Survey projects salaries in India, analyzing data from more than 1,200 organizations across 45 industries.
Salary increases are expected to increase in key sectors
“Strong domestic consumption, sustained investment and export growth continue to support business confidence, allowing employers to invest in talent while maintaining cost discipline. Stable salary budgets enable a more targeted approach to pay. Substantial improvements, particularly in manufacturing and technology, indicate a greater focus on market alignment, rare skills and critical talent. workforce and business value,” said Roopank Chaudhary, Head of Partner & Rewards Consulting, Talent Solutions, India, Aon.
By industry, the automobile and vehicle manufacturing, engineering design services, and technology platform and product sectors are expected to see salary increases of up to 9.5 percent, while life sciences and funds and asset management are expected to see salary increases of 9.6 percent. Meanwhile, according to the GlobalCapability Center, the wealth management and retail sectors are expected to deliver a 9.4 percent salary increase. The engineering and manufacturing sector is expected to grow by 9.3 percent, while the FMCG sector is expected to grow by 9.1 percent. The banking sector is expected to grow by 8.5 percent, the chemical sector by 8 percent, and the life insurance sector by 8.4 percent. The Consulting and Technology Services sector is expected to grow by 6.6 percent.
Attrition increases while competition for talent remains
Overall attrition will increase to 18 percent in 2026, from 16.2 percent in 2025 and 17.1 percent in 2024. The report added that the increase indicates competition for talent remains strong despite a stable salary budget.
The adoption of AI is driving the demand for specialized skills
In addition to retention, employers are reinventing their workforce strategies as AI becomes more embedded in their daily work. “The adoption of established AI productivity tools increased from 46.1% in 2025 to 56%, with usage increasing in every job cluster measured. Approximately 60% of employers are prioritizing the improvement of employee skills, while investment in agent AI and the demand for AI skills continue to grow. 2025,” he added.
“The rapid adoption of AI marks a shift from experimentation to enterprise-wide application. The next priority is to translate this momentum into measurable productivity and growth. Employers who establish reliable baselines, identify capabilities that create differentiated value and align appropriate workforce investments will be best placed to realize AI’s full potential,” added Chaudhary.
Wage Code compliance and payroll costs
Labor priorities are evolving along with the salary implications of the Wage Code. While 65.4 percent of employers are already in compliance and another 20.9 percent expect to be ready within six months, 42.8 percent expect an increase in payroll costs of at least 1 percent.
“Progress on the readiness of the Wage Code is encouraging, but compliance is only the first step. Employers must evaluate the labor and cost implications, align the cost changes to the company with a reward philosophy and communicate clearly about the transition. Early action will help organizations maintain salary competitiveness and workforce trust. With the implementation of the Wage Code, AI investments will require higher labor costs, where all organizations will expand their labor needs. invest in talent,” said Amit Kumar Otwani, Mitra Mitra, Solusi Talenta, India, Aon.
Published on October 14, 2026