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Amidst strong economic growth and an intensifying demand for skilled talent, India Inc may see a 9.4% overall salary increase across industries in 2025, according to the Total Remuneration Survey by Mercer, a business of Marsh McLennan.
Over the last five-year period, salary increments have steadily increased, rising from 8% in 2020 to a projected 9.4% in 2025. The automotive sector leads with anticipated increments of 10%, up from 8.8%, driven by the surge in electric vehicles and government-led ‘Make in India’ initiatives. Manufacturing and engineering follow closely with increments rising from 8% to 9.7%, reflecting a resurgence in the manufacturing ecosystem.
More than 1,550 companies in India participated in the survey, spanning diverse industries such as technology, life sciences, consumer goods, financial services, manufacturing, automotive and engineering.
“India’s talent landscape is experiencing a remarkable transformation. Pay premiums are also reshaping the workforce, additionally, the increased adoption of performance-linked pay plans by more than 75% of organisations signifies a holistic shift towards performance orientation, both in the short term and long term. Companies that prioritise these trends will be better positioned to attract and retain talent in a competitive market,” said Mansee Singhal, Mercer’s India careers leader.
In 2025, 37% of organisations plan to increase their headcount, and voluntary attrition is expected to stabilise at 11.9%, with agriculture and chemical (13.6%) and shared services organisations (13%) experiencing the highest rates, indicating a competitive talent market. It is also expected that some organisations will focus on strategic recruitment, competitive compensation, upskilling and employee engagement to attract talent, reduce turnover and sustain growth to address workforce demands.
The survey also examined the impact of artificial intelligence (AI), automation and digital transformation on India’s talent landscape. India has emerged as a leading global hub for AI adoption, with 55% of organisations actively integrating AI into operations. CEOs in India anticipate AI to be one of the key drivers of growth and productivity in the coming years.
“The survey highlights the strategic shifts organisations are making to attract and retain top talent. From adopting AI-driven solutions for personalised rewards to redefining the employee value proposition with flexibility and wellness at its core, businesses in India are prioritising value-driven approaches. These trends reflect a transformative era for the workforce, positioning India as a talent hub,” said Malathi KS, Mercer’s rewards consulting leader for cross industry.
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The automotive sector is set to lead with anticipated increments of 10%, up from 8.8%, driven by the surge in electric vehicles and government-led ‘Make in India’ initiatives, found the survey by Mercer.
“>
Amidst strong economic growth and an intensifying demand for skilled talent, India Inc may see a 9.4% overall salary increase across industries in 2025, according to the Total Remuneration Survey by Mercer, a business of Marsh McLennan.Over the last five-year period, salary increments have steadily increased, rising from 8% in 2020 to a projected 9.4% in 2025. The automotive sector leads with anticipated increments of 10%, up from 8.8%, driven by the surge in electric vehicles and government-led ‘Make in India’ initiatives. Manufacturing and engineering follow closely with increments rising from 8% to 9.7%, reflecting a resurgence in the manufacturing ecosystem.More than 1,550 companies in India participated in the survey, spanning diverse industries such as technology, life sciences, consumer goods, financial services, manufacturing, automotive and engineering.
“India’s talent landscape is experiencing a remarkable transformation. Pay premiums are also reshaping the workforce, additionally, the increased adoption of performance-linked pay plans by more than 75% of organisations signifies a holistic shift towards performance orientation, both in the short term and long term. Companies that prioritise these trends will be better positioned to attract and retain talent in a competitive market,” said Mansee Singhal, Mercer’s India careers leader.
In 2025, 37% of organisations plan to increase their headcount, and voluntary attrition is expected to stabilise at 11.9%, with agriculture and chemical (13.6%) and shared services organisations (13%) experiencing the highest rates, indicating a competitive talent market. It is also expected that some organisations will focus on strategic recruitment, competitive compensation, upskilling and employee engagement to attract talent, reduce turnover and sustain growth to address workforce demands.The survey also examined the impact of artificial intelligence (AI), automation and digital transformation on India’s talent landscape. India has emerged as a leading global hub for AI adoption, with 55% of organisations actively integrating AI into operations. CEOs in India anticipate AI to be one of the key drivers of growth and productivity in the coming years.“The survey highlights the strategic shifts organisations are making to attract and retain top talent. From adopting AI-driven solutions for personalised rewards to redefining the employee value proposition with flexibility and wellness at its core, businesses in India are prioritising value-driven approaches. These trends reflect a transformative era for the workforce, positioning India as a talent hub,” said Malathi KS, Mercer’s rewards consulting leader for cross industry.