India Inc likely to give 9.1% salary hikes in 2026: Aon

India Inc is expected to grant average salary increases of 9.1% in 2026, marking a slight uptick from this year, according to Aon’s Annual Salary Increase and Turnover Survey 2025–26 India.

The projection compares with an actual average increment of 8.9% recorded in 2025, signalling sustained wage growth despite a moderating hiring market. The survey, now in its 32nd edition, analysed data from more than 1,400 organisations across 45 industries.

Real estate and infrastructure, along with non-banking financial companies (NBFCs), are projected to see the highest salary increases in 2026. Pay hikes in NBFCs are expected to average 10.1%, while real estate and infrastructure firms may offer 10.2%. Automotive and vehicle manufacturing (9.9%), engineering design services (9.9%), and engineering and manufacturing (9.5%) are also forecast to deliver above-average increments.

By contrast, technology consulting and services firms are projected to see lower increases at 6.6%, down from 7% in 2025. Funds and asset management companies may also witness a moderation, with increments easing to 8.5% from 9.7% last year.

Roopank Chaudhary, partner and rewards consulting leader for Talent Solutions at Aon India, said the figures reflect improving macroeconomic conditions. He cited resilient domestic demand, moderating inflation and new trade agreements as factors underpinning a positive medium-term outlook, even as businesses contend with geopolitical uncertainty.

According to Aon, stronger projected salary growth in sectors such as real estate, NBFCs and manufacturing indicates that employers are channelling investments towards critical talent pools, particularly in technology, engineering and customer-facing roles.

Attrition rates have also stabilised, returning close to pre-COVID levels. Overall attrition declined to 16.2% in 2025, down from 17.7% in 2024 and 18.7% in 2023. The steady decline suggests that companies are benefiting from more measured hiring, improved workforce planning and sharper focus on engagement and career mobility.

The normalisation of attrition marks a significant shift from the pandemic-era churn, when aggressive hiring and job-switching drove double-digit turnover across sectors. Aon’s data indicates that organisations are now prioritising stability and targeted upskilling over rapid expansion.

The survey also comes as companies adjust to India’s newly notified labour codes. Amit Kumar Otwani, associate partner at Aon India, said the standardised definition of wages and expanded social security provisions are prompting employers to reassess compensation structures. He added that clear communication will be critical to maintaining workforce trust during the transition.

Taken together, the data points to a labour market that is stabilising rather than overheating. While salary growth remains robust by global standards, it reflects calibrated investment rather than exuberance. With attrition under control and regulatory changes underway, companies appear focused on building sustainable compensation strategies aligned to long-term growth.