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Average increase in salary up to 9%

There is news of relief for the working people in India. Even in 2026, companies can increase the salary of employees by an average of 9%. This increase is expected to remain around the level of 2025. This information has come out in Mercer's Total Remuneration Survey, in which more than 1,500 companies of the country were included.

Which sectors will get the maximum growth?

According to the survey, the highest salary hike can be seen in the manufacturing and engineering sectors as well as the automobile sector. An average increase of 9.5% in both these sectors is expected in 2026. At the same time, there may be a salary increase of about 9% in Global Capability Centers (GCC).

Why is the trend of salary increase stable?

According to Malti KS, Rewards Consulting Leader, Mercer India, this level of salary increase in India reflects a balanced economic environment. The economy is stable, but companies are cautious about spending. Along with this, stagnation is also being seen in the talent market and the attrition rate is now under control.

Increased focus on rewards and incentives

The survey also revealed that companies are making changes in their reward packages. Now, instead of long-term benefits, more emphasis is being given on short-term incentives, so that good performing employees can be motivated in a better way and they can be kept connected to the company.

Companies cautious about recruitment

Caution is also being taken in hiring for 2026. While 43% of companies were planning to add new employees in 2024, this figure is expected to drop to 32% in 2026. At the same time, about 31% companies have not yet taken any decision regarding their recruitment plans, which clearly shows the uncertainty about the future.

Attrition rate is decreasing

Another matter of relief is that the attrition rate among employees is continuously decreasing. Voluntary attrition was 13.1% in 2023, which has come down to 6.4% in the first half of 2025. At the same time, the rate of forced layoff has also come down to 1.6%. Overall, salary increases in 2026 are expected to be steady but balanced. Companies are working on a strategy to retain good talent while controlling expenses, which seems to be creating a more stable and reliable environment for employees.