Salary increases this year see a drop, as 2024 will witness an average hike of 9.5 per cent across all sectors, according to Aon India's 30th salary increase and turnover survey.

The salary increment prediction for 2023 was 10.3 per cent, but the actual pay hike was 9.7 per cent. The survey, conducted across 1,400 Indian organisations in various sectors, also highlighted the sectors where the highest salary increments are projected. These include manufacturing at 10.1 per cent and the professional services sector at 9.7 per cent. Other sectors, such as NBFC, BFSI, and Life Sciences, will also see average pay hikes of 11.1 per cent, 9.8 per cent, and 9.9 percent, respectively. Additionally, the highest salary increment will be for junior roles at 9.9 per cent, as compared to mid-management roles at 9.4 per cent, and senior management roles at 9.1 per cent.

Roopank Chaudhary, Partner and Human Capital Solutions, Aon India, said, “The projected increase in salaries in the Indian formal sector indicates a strategic adjustment in response to the evolving economic landscape. Despite a conservative global sentiment, industries such as infrastructure and manufacturing continue to project robust growth, indicating the need for targeted investments in certain sectors,”

Jung Bahadur Singh, Director Talent Solutions at Aon India stated, “In 2023, organisations navigated a challenging environment, balancing a generous average salary increment amidst high attrition rates. As leaders prepare for 2024, their focus is likely to shift towards building a supportive work environment to foster employee engagement in a dynamic job market.”

AON India 2024 Salary Increase and Turnover Survey: Key Findings 

According to the survey, the key findings show a moderate optimism in the overall business outlook. Although the salary hike may have dipped slightly from 9.7 per cent in 2023 to 9.5 per cent in 2024, this decrease is primarily driven by the services sector, while the manufacturing sector maintains similar salary increase budgets as last year. Industries such as financial institutions, engineering, automotive, and life sciences are expected to offer the highest increases, whereas sectors more affected by global macroeconomic conditions, such as IT and technology consulting, are likely to see lower increases.

Apart from this, the overall talent attrition dropped to 18.7 per cent in 2023, down from 21.4 per cent in 2022. This suggests that the job market remains competitive, and the rate of people quitting their jobs has decreased. This favours organisations to focus on building talent capabilities and enhancing productivity, creating a positive cycle.

“With attrition rates easing slightly, companies are shifting away from hefty cash offers and retention bonuses. There is a growing focus on talent retention and we're now witnessing more measured increments and package adjustments. Notably, benefits are reemerging as a significant component. Beyond traditional perks, the emphasis is on wellness, flexibility, and supporting employees' mental and physical health. Offerings such as wellness programmes, flexible work arrangements, enhanced health coverage, and mental health counselling are becoming standard in packages, reflecting a shift towards prioritising employee well-being as essential,” commented Roopank

You may also like:

• Tech's AI superstars rake in $1 mn: Are you paying enough?
• The largest CEO pay in history gone wrong

HR and talent leaders need to design people strategies fostering resilience and agility. Given the evolving demand for new skills, they must also proactively address talent supply shortages and cultivate ethical, inclusive, and sustainable organisational cultures. India's talent pool presents a significant opportunity for organisations to leverage expertise in AI/ML and innovation. However, young talent in India values a culture full of learning opportunities over traditional rewards and recognition. Therefore, HR leaders need to design their employee value propositions to align with talent needs and facilitate talent mobility and flexibility in work arrangements to meet evolving skill demands. A holistic approach prioritising adaptability, talent development, and ethical leadership, both for organisations and their employees, will help lead sustainably.