Outlook Business Desk
The third edition of the Deloitte India Talent Outlook predicts an average salary increase of 8.8% in 2025, down from 9.0% in 2024, making it the lowest hike in a decade, except for 2020-21.
The survey reveals that 75% of companies plan to either reduce or maintain salary hikes at last year's levels. While most sectors expect stable or slightly lower increments, the consumer products sector anticipates a significantly reduced budget for salary increases.
Top performers are likely to receive 1.7 times the increment of average performers, slightly lower than the previous year. Employees in individual contributor and junior management roles can expect 1.3 times higher increments compared to top management.
One-third of participating companies anticipate fewer promotions than last year, but the overall promotion rate is expected to remain stable at around 12%. Most companies do not plan to raise promotion-linked salary increments compared to previous years.
Employee attrition in 2024 has eased to 17.4%. However, companies across various sectors and sizes remain optimistic about hiring, with nearly 80% planning to expand their workforce in the next financial year.
Prakhar Tripathi, Partner at Deloitte India, stated that with slow revenue growth, companies are facing pressure on compensation budgets. However, controlled attrition and moderate inflation are enabling firms to manage salary hikes without negatively impacting talent.
Many companies find it challenging to balance business goals with employee training, and 50% lack a structured competency framework. AI adoption is growing for skill-gap analysis, content curation, and workforce development.
Technology adoption in HR has improved data-driven decision-making, with many companies using analytics for compensation, productivity, learning, and diversity management. However, challenges like system integration, HRMS costs, and employee adoption hinder productivity gains.