India, Oct 15 : India’s salary growth is expected to remain steady at 9.1 per cent in the 2026-27 financial year, supported by domestic consumption, investment activity and export growth, even as geopolitical tensions and global trade uncertainties pose challenges for businesses, according to a survey released on Wednesday.
Non-banking financial companies (NBFCs) are projected to record the highest salary increases at 10.1 per cent in 2027, followed by the energy sector at 9.9 per cent. Real estate and infrastructure companies are expected to offer average pay hikes of 9.8 per cent, reflecting continued demand for talent across key industries.
The projections are part of the Annual Salary Increase and Turnover Survey for India 2026-27 conducted by global professional services firm Aon plc. The study analysed responses from more than 1,200 organisations operating across 45 industries.
Roopank Chaudhary, Partner and Rewards Consulting Leader at Aon’s Talent Solutions business in India, said strong domestic consumption, sustained investments and expanding exports were helping businesses maintain confidence and continue investing in their workforce while exercising cost discipline.
He noted that stable salary budgets were encouraging employers to adopt more targeted compensation strategies. Companies are increasingly focusing on aligning salaries with market conditions, rewarding employees with specialised skills and retaining professionals in critical roles.
The survey also highlighted an increase in employee attrition, indicating that competition for skilled workers remains intense despite relatively stable pay budgets.
Overall attrition climbed to 18 per cent in 2026, compared with 16.2 per cent in 2025 and 17.1 per cent in 2024. The rise suggests that organisations continue to face challenges in retaining employees as opportunities and skill requirements evolve across industries.
Artificial intelligence is emerging as another major factor influencing workforce planning, compensation and employee development. The adoption of AI productivity tools increased from 46.1 per cent in 2025 to 56 per cent, with usage expanding across every job category assessed in the survey.
Around 60 per cent of employers identified employee upskilling as a priority, reflecting the growing need to prepare workers for technology-driven changes. Businesses are also increasing their focus on agentic AI, which can perform tasks and coordinate actions with varying levels of human supervision.
Demand for specialised AI capabilities is translating into higher compensation. Employers are offering approximately 10 per cent higher pay premiums for positions in artificial intelligence, machine learning and data science compared with 2025.
Chaudhary said the rapid adoption of AI indicated that businesses were moving beyond experimentation towards broader organisational implementation. He stressed that the next challenge for employers would be to convert technology investments into measurable productivity improvements and business growth.
He added that companies would need to identify the skills and capabilities delivering the greatest value, establish reliable productivity benchmarks and direct workforce investments towards areas with the strongest potential returns.
The survey also examined employers’ preparedness for India’s Wage Code requirements and the potential financial implications of compliance.
According to the findings, 65.4 per cent of employers had achieved compliance, while another 20.9 per cent expected to meet the requirements within six months. Meanwhile, 42.8 per cent of organisations anticipated payroll cost increases of at least 1 per cent as a result of the changes.
Amit Kumar Otwani, Associate Partner at Aon’s Talent Solutions business in India, said progress towards compliance was encouraging but emphasised that organisations needed to evaluate its broader implications.
He said employers should assess the impact on workforce structures and payroll expenses, ensure that compensation changes remained consistent with their rewards policies, and communicate decisions transparently to employees.
Maintaining employee trust and competitive compensation will remain important as businesses adapt to changing skill requirements and expand their use of AI-based technologies.
The survey’s findings indicate that salary planning in 2026-27 will involve balancing compensation competitiveness, employee retention, regulatory preparedness and investments in emerging skills. Although overall salary increases are expected to remain stable, employers are likely to place greater emphasis on targeted rewards and workforce capabilities to sustain business performance.