HCM & HRIS

India Inc to see 9% salary increments in 2026, with manufacturing, automotive sectors set for highest hikes

December 17, 2025
www.ETHRWorld.com
No Comments

Brinda Sarkar

< />Companies in India are likely to hand out average salary increases of 9% in 2026, the same as last year, according to a survey.<br /><br /><!– PROMOSLOT_M –>The manufacturing & engineering sector and the automotive sector are set to have the highest salary increases of 9.5%, with global capability centres (GCCs) following closely behind with projected hikes of 9%, according to Mercer’s Total Remuneration Survey of more than 1,500 companies.<br /><br /><div class=” article-detail-ad-slot=”” captionrendered=”1″ data-src=”https://etimg.etb2bimg.com/photo/126029540.cms” height=”442″ loading=”eager” src=”https://hr.economictimes.indiatimes.com/images/default.jpg” width=”590″></img></p> </div> <p>“The steady merit increase level in India reflects a balance between a stable yet cautious economic environment, a moderating talent market with attrition rates also being stable, and organisational priorities on cost control and performance differentiation,” Malathi KS, rewards consulting leader-India at Mercer, told ET.</p> <p>The survey also revealed that organisations are continuing to refine their rewards packages, with a focus on short-term incentives, demonstrating an effort to balance cost discipline with the need to attract and retain high-impact talent.</p> <p>Further, there is a more cautious hiring stance alongside stabilising attrition levels.</p> <p>Projected hiring intentions show the share of organisations planning to ‘add staff’ declining from 43% in 2024 to 32% in 2026, while those ‘not decided’ on their 2026 plans rising to 31%, signalling increased uncertainty around future workforce expansion.</p> <p>At the same time, both voluntary and involuntary attrition are on a downward trajectory. Voluntary attrition across all industries stood at 13.1% in 2023, 11.7% in 2024 and 6.4% in the first half of 2025, while involuntary attrition was 2.9% in 2023, 2.8% in 2024 and 1.6% in the first half of 2025, indicating a potentially more stable employee base amidst evolving economic conditions.> </p> <div> <div aria-label=

Join the community of 2M+ industry professionals.

Subscribe to Newsletter to get latest insights & analysis in your inbox.

All about industry right on your smartphone!

  • Download the App and get the Realtime updates and Save your favourite articles.

Leave a Reply

Your email address will not be published. Required fields are marked *