Salaries in India projected to rise by 9.5% in 2024, manufacturing sector to lead: Aon Survey

Aon which is a British-American professional services and management consulting firm in its Annual Salary Increase and Turnover Survey 2023–24 for India has projected a 9.5% hike in salaries in 2024. This however is a slight decrease from the actual 9.7% salary increase seen in 2023.

Salary hike in 2024

The report further mentioned that India continues to roll out the highest salary increases among the major economies in the APAC region. As per the report, after the post-pandemic high increments in 2022, the salary increase in India seems to have stabilised at high single digits.

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The real wage growth is expected to be higher compared to 2023 even as the inflation is projected to ease down in 2024.

Financial institutions, engineering, automotive, and life sciences are projected to get the highest salary increases, while retail and technology consulting and services are on the lower side of the spectrum.

Manufacturing sector leads, with an expected salary rise of 10.1% in 2024 followed by Life sciences and financial services at 9.9%, Global Capability Centers at 9.8%.

“The projected increase in salaries in the Indian formal sector indicates a strategic adjustment in response to the evolving economic landscape. Despite a conservative global sentiment, industries such as infrastructure and manufacturing continue to project robust growth, indicating the need for targeted investments in certain sectors”, said Roopank Chaudhary, partner and chief commercial officer for Talent Solutions at Aon in India

Attrition Rate

The report also noted a decline in the attrition rate from 21.4% in 2022 to 18.7% in 2023. This hints at a possible peak at the Turnover rate, suggesting a competitive job market. A lower attrition rate is seen as an advantage to the employers as they can focus resources on capability enhancement and productivity.

As per Jang Bahadur Singh, Director for Talent Solutions at Aon in India, organisations in 2023 navigated a demanding environment with a generous salary increment amid high attrition rates. He further projected that in 2024 leaders are likely to prioritise building supportive work environments to foster employee engagement in a dynamic job market.

The survey analysed data from 1414 companies spanning nearly 45 industries.