India Inc. set for 9.1% salary hikes in 2027: What the numbers reveal, and are projections too optimistic?
How much of a pay hike are you expecting in 2027? India Inc. is projecting a 9.1% salary increase, with some sectors likely to offer bigger raises. Here’s what Aon’s Annual Salary Increase and Turnover Survey for India 2026-27, released on October 14, reveals
The 33rd edition of the survey analysed data from more than 1,200 organisations across 45 industries.
What did the survey say about the salary hike?
The projected salary increase of 9.1% for 2027 is broadly stable compared with the actual 9% increase in 2026, reflecting continued resilience in compensation budgets despite geopolitical uncertainty and global trade risks, the report said.
However, salary increase projections vary by industry. For example, Non-banking financial companies are projected to lead salary growth in 2027 at 10.1%, followed by energy at 9.9% and real estate and infrastructure at 9.8%.
“Strong domestic consumption, sustained investment and export growth continue to support business confidence, allowing employers to invest in talent while maintaining cost discipline,” said Roopank Chaudhary, Partner & Rewards Consulting Leader, Talent Solutions, India, Aon.
“Stable salary budgets are enabling a more targeted approach to pay. A modest rise in non-merit adjustments, particularly in manufacturing and technology, reflects greater focus on market alignment, scarce skills and critical talent.”
Salary hike projections far from reality?
But the ground reality seems totally different.
While the survey projects an average of 9.1% for 2027, Zoho founder Sridhar Vembu has a different message for his employees: no hike this year.
Citing soaring server costs, rising AI expenses and global uncertainty, Vembu wrote on social media that these are really tough times for software jobs, and they are trying to avoid large-scale workforce reductions. “We will work hard to avoid mass lay-offs,” he writes.
His post has also sparked reactions on social media, with users speaking about salary freezes, job insecurity and concerns about the software industry’s outlook.
Here’s what else the AON survey reveals:
Attrition rises to 18%
Overall attrition increased to 18% in 2026, compared with 16.2% in 2025 and 17.1% in 2024. The increase suggests competition for talent remains strong despite broadly stable salary budgets.
AI adoption and demand for skills increase
Adoption of AI productivity tools rose from 46.1% in 2025 to 56%, with usage increasing across every job cluster measured. Around 60% of employers are prioritising upskilling of employees, while investment in agentic AI and demand for AI skills continue to grow.
Talent premiums for AI, machine learning and data science roles increased by approximately 10% from 2025.
“The rapid adoption of AI signals a shift from experimentation to enterprise-wide application,” Chaudhary said. He added that employers must translate this momentum into measurable productivity and growth.
Wage Code compliance and payroll costs
The survey found that 65.4% of employers are already compliant with the Wage Code, while another 20.9% expect to be ready within six months. Meanwhile, 42.8% anticipate payroll cost increases of at least 1%.
“Progress on Wage Code readiness is encouraging, but compliance is only the first step,” said Amit Kumar Otwani, Associate Partner, Talent Solutions, India, Aon.
He said employers need to assess workforce and cost implications, align changes to cost to company with their rewards philosophy and communicate the transition clearly.
