According to Deloitte India Talent Outlook 2025, the average salary increment in India is projected to be 8.8% in 2025, down from 9.0% in 2024. Excluding 2020–2021, this is expected to be the lowest increment in a decade.
The third edition of the Deloitte India Talent Outlook was released on 7 March 2025. This survey aims to provide decision-makers with an overview of compensation, performance, talent management, and HR technology data and trends from over 500 companies across seven sectors.
All responses were validated for accuracy. In this press release by Deloitte Touche Tohmatsu India LLP (Deloitte India), references to India represent the collective perspectives of the survey respondents.
Workforce and Increment
As Indian companies navigate global and local headwinds, there is a clear focus on optimising compensation cost budgets, with pay increases for 2025 being forecast at 8.8 percent (compared with 9.0 percent in 2024).
The survey shows 75 percent of companies will either reduce or keep their pay increases the same as the last year.
Furthermore, while most sectors will keep the increment growth stable or moderately lesser than the previous year, the consumer products sector expects a significantly lower increment budget.
While organisations continue to focus on retaining key talent, top performers can expect a 1.7x higher increment than average performers, which is moderately lower than last year.
Employees at individual contributor and junior management levels can expect a 1.3x higher increment than the top management level.
While a third of the participating companies expected to make lower promotions than last year, the overall percentage of employees receiving promotions is projected to remain steady at ~12 percent.
Most companies expect to not increase their promotion-linked pay increases compared with previous years.
Attrition in 2024 has moderated to 17.4 percent. However, it is important to highlight that companies across sectors and sizes are still quite optimistic about hiring, and almost 80 percent of companies plan to increase headcount in the coming financial year.
Prakhar Tripathi, Partner, Deloitte India, said, “In an environment where companies are witnessing muted revenue growth, compensation budgets are naturally coming under pressure. Controlled attrition and moderate inflation are helping companies optimise pay increases without adversely affecting talent outcomes. However, we expect the focus on performance and talent differentiation to remain core to the HR strategies, regardless of other considerations.”
Learning and development
Organisations increasingly adopt a structured, data-driven approach to workforce upskilling/re-skilling by implementing a common skills framework to identify talent capability gaps.
However, one in every two organisations acknowledges that they do not have a structured competency framework or do not update it regularly.
Organisations indicated challenges in balancing business priorities and training needs, assessing skill gaps, measuring the impact of the learning initiatives and keeping up with technology changes as the top challenges for learning and development.
A few organisations have enhanced the pace of AI adoption in learning, focusing on areas of skill-gap analysis, content curation and AI-powered development journeys.
Technology-enabled HR
Adopting technology in HR has significantly enhanced data-driven decision-making, with many organizations using analytics to manage their human capital in compensation management, workforce productivity, learning and development, and diversity.
Organisations have highlighted issues pertaining to integrating multiple HR systems, the cost of purchasing and maintaining HRMS and employee adoption, which is hindering significant productivity gains.
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