'Decisions on talent and rewards have shifted as employees and companies are operating in a buyer's market across most skill categories.'
Salary hikes trend 2026
Average salary increments across India Inc are expected to remain largely stable at 9.1 per cent in 2026, marginally higher than the 9 per cent increase recorded in 2025, according to the Deloitte India Talent Outlook 2026 report released on Monday.
The survey, conducted between January and February 2026, gathered responses from organisations across seven sectors and 27 sub-sectors in India, primarily from chief human resources officers and senior HR leaders.
The report recorded changes in performance ratings within companies.
Key Points
- India Inc salary increments expected to remain stable at 9.1 per cent in 2026, marginally above 2025 levels.
- Top performance ratings declined sharply, while lower ratings increased, indicating stricter performance evaluation frameworks across organisations.
- Employee promotions rose to 14 per cent, while attrition edged up slightly, reflecting evolving workforce dynamics.
- Pharma, manufacturing and financial services sectors show modest increment growth, while technology sector hikes soften.
- Hiring slowdown and rising AI adoption are reshaping workforce demand, especially in IT services and global capability centres.
Performance ratings tighten
The share of employees receiving the highest rating on a five-point performance scale declined to 7 per cent in 2025, from 10 per cent in 2024.
'Approximately 16 per cent of the workforce now falls within the bottom two performance ratings, reflecting a more rigorous calibration of performance outcomes,' added the report.
Promotions and attrition rise
The proportion of employees promoted rose to 14 per cent in 2025, compared with 12 per cent in 2024, with higher levels observed in manufacturing and operationally intensive organisations.
Attrition inched up to 17.6 per cent in 2025, from 17.4 per cent in 2024.
"The past few years have seen most organisations revert to operating within a narrow spectrum of salary increases every year," said Anandorup Ghose, partner in Human Capital Consulting at Deloitte India.
"Decisions on talent and rewards have shifted as employees and companies are operating in a buyer's market across most skill categories," Ghosh added.
"There is a far greater focus on driving productivity and ensuring effective and directed skilling spends," Ghosh pointed out.
Sector-wise salary projections
Salary increment budgets in India have broadly settled within a narrow band in recent years after the volatility seen during the pandemic recovery period, when companies raised pay more sharply amid strong hiring demand and talent shortages.
Surveys by consulting firms have since shown a gradual stabilisation in annual salary hikes across sectors.
Sector-wise projections for 2026 show variation in increment levels compared with 2025 actuals.
The pharmaceuticals segment is projected to record salary increases of about 10.1 per cent in 2026, compared with 9.8 per cent in 2025, while the broader life sciences sector is expected to see increments of around 9.9 per cent, up from 9.7 per cent.
Manufacturing companies are projected to offer average increases of about 9.8 per cent in 2026, compared with 9.6 per cent in 2025.
Within the sector, automotive original equipment manufacturers are expected to give increments of about 10.3 per cent, compared with 10.1 per cent last year, while power and renewable energy companies are projected to offer around 10.4 per cent, up from 10.3 per cent.
Semiconductor firms are expected to record increments of about 10.1 per cent, compared with 9.6 per cent in 2025.
In financial services, the overall projected increment is 9.1 per cent in 2026, compared with 8.9 per cent in 2025.
Within the sector, non-banking financial companies are expected to offer increases of about 9.5 per cent, compared with 9.1 per cent last year, while asset management companies are projected to record increments of about 9.4 per cent, up from 9.2 per cent.
Tech sector hiring slowdown
In the technology sector, IT product companies are projected to give increments of about 9.2 per cent in 2026, compared with 9.3 per cent in 2025, while IT services firms are expected to record increases of about 6.9 per cent, down from 7.6 per cent last year.
Global capability centres are projected to offer 8.8 per cent increments, compared with 9 per cent in 2025.
The moderation in salary increments in parts of the technology sector comes amid a broader slowdown in hiring after the rapid expansion seen during the pandemic years.
Layoffs at several global and Indian tech firms since 2023 and the growing use of artificial intelligence tools have also begun reshaping workforce demand, with companies focusing on specialised skills while moderating overall hiring.
Feature Presentation: Ashish Narsale/Rediff
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