Salaries in India Likely to go up by 10.3% in 2023

New Delhi: The salaries in India are expected to increase by 10.3 percent in 2023, compared to an actual increase of 10.6 percent in 2022, a report showed on Thursday. Although slightly lower than last year, the projected increase continues to be in the double digits despite concerns about economic volatility, which may be in response to attrition rates, according to Aon, a leading global professional services firm.

At 21.4 percent, the attrition rate in India for 2022 remained high -- a consequence of an ever-changing talent strategy and the ongoing gap between the supply and demand of talent. (Also Read: 5 Reasons of Pakistan Economic Crisis: Explained)

"India Inc. has awarded aggressive salary increases over the last two years, which has some companies grappling with higher wage bills," said Roopank Chaudhary, partner, Human Capital Solutions, India at Aon. (Also Read: Bank FDs vs Senior Citizens Savings Scheme (SCSS): Check Interest Rate and Other Benefits)

"Forward-looking organisations are therefore contextualising salary increase planning with data-driven analysis and the unique circumstances of their own industry and organisation to maintain their workforce resilience and make more-informed decisions," Chaudhary added.

While the merit increase projections that is the increase based on individual performance stays steady at 7.8 percent, the non-merit salary increase projections are the increase on top of merit increase such as market corrections, special adjustments, and promotions are expected to moderate to 2.8 percent, which is higher than the historical average.

This is particularly noteworthy at junior levels where the non-merit increase projections are as high as 3.3 percent, the findings showed.

"The non-merit salary increase projections continue to be moving up as firms budget for retaining talent through promotions and off-cycle corrections," said Pritish Gandhi, director/leader of the executive compensation and governance practice in India at Aon.