Synopsis

Salaries in India are projected to increase by 9.1% in 2027 after a 9% rise in 2026. Non-banking financial companies are expected to lead in salary growth with an increase of 10.1%. Employers face challenges in retaining talent amid rising attrition rates and the implementation of the Wage Code. AI skill demand is growing as companies adopt AI productivity tools at a significant pace.

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Salaries in India are projected to rise by 9.1% in 2027, as compared to an actual increase of 9% in 2026, according to Aon's Annual Salary Increase and Turnover Survey. India Inc's employers are walking a finw line trying to balance talent investment with cost pressures, the study found.

The survey analyzed data from over 1200 organisations across 45 industries.

Non-banking financial companies (NBFCs) are expected to lead the salary growth in 2027, with a projected increase of 10.1%. The energy sector follows at 9.9%, while real estate and infrastructure are projected to record a 9.8% hike in pay.

“Strong domestic consumption, sustained investment and export growth continue to support business confidence, allowing employers to invest in talent while maintaining cost discipline,” said Roopank Chaudhary, Partner and Rewards Consulting Leader, Talent Solutions, India, Aon.

The survey found that overall employee attrition rose to 18% in 2026, up from 16.2% in 2025 and 17.1% in 2024, indicating continued competition for talent despite largely stable salary budgets.

Salary increase projections vary across industries, with retail expected to see pay rise by 9% in 2027, vs 8.9% in 2026.

Automotive and vehicle manufacturing salaries are expected to rise by 9.5%, while banking salaries are projected to increase by 8.5%. Technology consulting and services are expected to see a 6.6% increase, unchanged from 2026.

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Employers are also adjusting their workforce strategies as artificial intelligence becomes more widely used at work. The adoptions of AI productivity tools increased from about 46% in 2025 to 56% in 2026.

Around 60% of employers are prioritising employee upskilling. Demand for AI skills is also increasing, with talent premiums for roles in artificial intelligence, machine learning and data science rising by about 10% from 2025.

“The rapid adoption of AI signals a shift from experimentation to enterprise-wide application. The next priority is translating that momentum into measurable productivity and growth,” Chaudhary said.

He added that employers need to identify the skills and capabilities that create business value and direct workforce investments accordingly.

The survey also examined employers’ preparedness for the Wage Code and its potential impact on payroll costs. It found that 65.4% of employers were already compliant, while another 20.9% expected to be ready within six months.

About 42.8% of employers anticipated payroll cost increases of at least 1% due to the Wage Code.

“Progress on Wage Code readiness is encouraging, but compliance is only the first step,” said Amit Kumar Otwani, Associate Partner, Talent Solutions, India, Aon.

He said employers need to assess workforce and cost implications, align changes to cost to company with their rewards policies, and communicate the transition clearly.

The findings show that employers are maintaining salary budgets while focusing on retaining skilled employees, building AI capabilities and preparing for changes in wage regulations.

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