Get ready for fatter paychecks, India Inc. A fresh EY India report forecasts average salary increments hitting 9.1 percent by 2026, with Global Capability Centers (GCCs) poised for the biggest jumps at 10.4 percent. This surge stems from unrelenting global hunger for tech-savvy talent in digital realms.
Financial services are hot on the heels with nearly 10 percent hikes, while e-commerce eyes 9.9 percent and pharma-life sciences sectors aim for 9.7 percent. These projections paint a vibrant picture of wage growth amid economic optimism.
The job market is cooling off positively, with attrition sliding to 16.4 percent in 2025 from 17.5 percent in 2024. Most exits—over 80 percent—are by choice, as employees leap to superior roles rather than economic pressures.
High attrition persists in financial services (24 percent), professional services, and IT-high-tech arenas. GCCs, however, shine with just 14.1 percent turnover, making them magnets for stability-seeking professionals.
EY’s Abhishek Sen warns that pay evolution goes beyond mere percentages. ‘Companies are rethinking talent investments,’ he says. ‘It’s about prioritizing skills that matter, striking a balance between fierce rivalry and enduring stability.’
Skills are the new currency. About 50 percent of firms are adopting skill-based pay over outdated position hierarchies. Premiums of 30-40 percent await masters of AI, GenAI, ML, cybersecurity, and cloud tech—skills now vital for corporate success.
Meanwhile, variable compensation’s share swelled to 16.1 percent in 2025, up from 14.8 percent. This shift empowers businesses to tie rewards directly to performance, fostering a merit-driven culture as India navigates tech-driven transformations.