India Inc likely to offer 9.1% salary hikes in 2026; GCCs lead with 10.4%: Report
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Variable pay for CXOs reached 27.5 per-cent in 2025, while individual contributors saw an average of 11 percent.
Companies are increasingly moving away from uniform annual increments and adopting differentiated reward strategies
- India Inc to see average salary hikes of 9.1 percent in 2026
- GCCs, financial services, and e-commerce lead salary growth
- Skill-based pay and variable compensation are rising trends
India Inc is set to deliver steady salary growth in 2026, signalling resilience in the job market despite global headwinds and shifting domestic dynamics, according to two major compensation surveys released this week.
Aon’s 32nd Annual Salary Increase and Turnover Survey 2025–26 projects average salary hikes of 9.1 per cent in 2026, marginally higher than the 8.9 per cent increase recorded in 2025. The survey draws insights from more than 1,400 organisations across 45 industries, indicating that corporate India continues to invest in talent even amid economic uncertainties.
Separately, the latest Future of Pay report by EY India also pegs average salary increments for 2026 at 9.1 per cent, compared with 9.3 per cent in 2025, pointing to a broadly stable compensation outlook.
GCCs lead salary growth
Global Capability Centres (GCCs) are expected to top the pay charts in 2026, with projected increments of 10.4 per cent, driven by sustained global demand for digital and technology capabilities. The report notes that salary growth in GCCs remains structurally elevated due to continued investment and scarcity of specialised skills.
Financial services firms are likely to see hikes of around 10 per cent, followed by e-commerce at 9.9 per cent and life sciences and pharmaceuticals at 9.7 per cent. Real estate, infrastructure and non-banking financial companies (NBFCs) are also projected to deliver among the strongest increases, reflecting momentum in capital deployment and credit growth.
In contrast, engineering, manufacturing, automotive and infrastructure segments are witnessing moderation in increments compared with prior years, amid cautious capital expenditure cycles, utilisation pressures and tighter margin management.
Shift towards skill-based pay
Companies are increasingly moving away from uniform annual increments and adopting differentiated reward strategies. Employers are holding overall salary budgets relatively steady but sharpening pay differentiation through targeted corrections, skill premiums and performance-linked rewards.
Nearly half of the organisations surveyed are transitioning from traditional role-based compensation structures to skill-based frameworks. Professionals with expertise in artificial intelligence, generative AI, machine learning, cybersecurity and cloud computing are commanding salary premiums of 30–40 per cent, underscoring the premium placed on future-ready capabilities.
Outstanding performers are set to benefit disproportionately. The EY report indicates that top-rated employees could receive 1.5 to 1.6 times the increment awarded to those who meet expectations, reinforcing a sharper pay-for-performance culture.
Variable pay on the rise
Variable compensation is emerging as a larger component of total pay. The average variable payout as a share of fixed salary rose to 16.1 percent in 2025 from 14.8 percent a year earlier.
The shift towards higher at-risk pay is visible across seniority levels. Variable pay for CXOs reached 27.5 per-cent in 2025, while individual contributors saw an average of 11 percent. Payout dispersion has also widened, with top performers earning 120–150 per cent of target incentives, compared with 60–80 per cent for average performers.
Additionally, about 35 per cent of large organisations have begun linking ESG-related key performance indicators to leadership variable pay, reflecting a broader integration of sustainability goals into executive compensation.
Attrition eases, but remains voluntary-led
The reports also highlight a gradual cooling in employee attrition. Overall attrition fell to 16.4 per cent in 2025 from 17.5 per cent in 2024, suggesting improved workforce stability.
However, more than 80 per cent of exits continue to be voluntary, indicating that job switches are largely driven by better opportunities rather than workforce reductions. Financial services recorded the highest attrition at 24 per cent, while professional services and hi-tech and IT sectors also saw elevated churn. GCCs, by comparison, reported relatively lower attrition at 14.1 per cent.
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