Salaries in India to see slower growth in 2024, still maintain lead in APAC: Survey

In 2024, salaries in India are expected to witness a slower growth compared with the previous year, yet the country is projected to have the highest salary increases among major economies in the Asia-Pacific region, according to a survey by global professional services firm Aon.

Salaries in the country are projected to see a 9.5% increase in 2024, slightly lower than the 9.7% rise witnessed in 2023, attributed to shifts in market dynamics, as per Aon’s Annual Salary Increase and Turnover Survey 2023-24 India. It is based on data gathered from 1,414 companies from almost 45 industries.

Expected salary increases in certain APAC countries for 2024 are as follows: Bangladesh (7.3%), Indonesia (6.5%), China (5.7%), the Philippines (5.5%), Australia (4.1%), and Singapore (4.0%).

“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.

Sectors such as non-bank financial companies (11.1%), engineering/manufacturing (10.1%), automotive/vehicle manufacturing (9.9%), and financial institutions (9.9%) anticipate the highest salary increases, while startups (8.5%), retail (8.4%), and technology consulting and services (8.2%) are positioned at the lower end of the spectrum, according to the survey.

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Salary increases in India have seemingly stabilised at high single digits following the post-pandemic surge in 2022, with attrition rates also showing signs of easing after the pent-up demand caused by the pandemic.

The survey revealed that the overall attrition rates fell to 18.7% in 2023 from 21.4% in 2022, indicating a competitive job market and suggesting that turnover rates may have reached their peak.

“In 2023, organisations navigated a challenging environment, balancing a generous average salary increment amidst high attrition rates. As leaders prepare for 2024, their focus is likely to shift towards building a supportive work environment to foster employee engagement in a dynamic job market,” Jang Bahadur Singh, Director for Talent Solutions at Aon in India, noted.