By 2026, India’s corporate workforce could enjoy average salary growth of 9.1 percent, according to EY India’s insightful ‘Future of Pay’ analysis. Global Capability Centers (GCCs) are set to outpace others with up to 10.4 percent increases, fueled by worldwide demand for advanced digital and tech capabilities.
Sector-wise, financial services lead with around 10 percent projections, trailed by e-commerce at 9.9 percent and life sciences/pharma at 9.7 percent. This data underscores a broadening investment in human capital across key industries.
Attrition trends offer reassurance: rates fell to 16.4 percent in 2025, down from 17.5 percent in 2024, indicating market maturity. Notably, more than 80 percent of job switches are proactive, driven by opportunity rather than insecurity.
Financial services suffer the most at 24 percent attrition, alongside elevated rates in professional services and high-tech/IT. GCCs counter this with a modest 14.1 percent, highlighting their role in talent retention.
Abhishek Sen from EY India articulates the paradigm shift: ‘Pay’s future hinges not only on increment scales but on skill prioritization and harmonizing competition with sustainability.’ Firms are realigning investments accordingly.
The rise of skills-based remuneration is evident, with nearly half the surveyed organizations transitioning from role-centric to competency-focused pay. Specialists in AI, generative AI, machine learning, cybersecurity, and cloud computing stand to gain 30-40 percent more, as these areas propel business innovation.
Variable pay’s prominence grows too, comprising 16.1 percent of packages in 2025 versus 14.8 percent prior. This mechanism ensures rewards mirror contributions, positioning Indian corporates for sustained competitiveness in a skill-hungry global economy.