Aon Study Finds Salaries in India Projected to Rise 9.1% in 2027 as Employers Balance Growth and Cost Pressures
• Attrition rises to 18% in 2026, intensifying competition for critical skills
• Stable budgets drive targeted pay, AI investment and Wage Code readiness
CHENNAI, Oct. 2026 – Aon plc (NYSE: AON), a leading global professional services firm, today released findings from its Annual Salary Increase and Turnover Survey for India 2026-27, which projects salaries in India will increase by 9.1% in 2027. Now in its 33rd year, the survey is one of India’s largest and most comprehensive rewards studies, analysing data from more than 1,200 organisations across 45 industries.
The projected salary increase of 9.1% for 2027 is broadly stable compared with the actual 9% increase in 2026. This reflects continued resilience in compensation budgets despite geopolitical uncertainty and global trade risks.
Salary increase projections vary by industry. 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. Employers are increasingly focused not only on how much they spend, but where that investment can deliver the greatest workforce and business value.”
Industry Actual Salary Increases (2026) (%) Projected Salary Increases (2027) (%)
Overall India 9 9.1
Automotive/Vehicle Manufacturing 9.7 9.5
Banking 8.6 8.5
Chemicals 8.1 8
Energy (Oil/Gas/Power) 9.7 9.9
Engineering Design Services 9.6 9.5
Engineering/Manufacturing 9.5 9.3
Fast Moving Consumer Goods 9 9.1
Funds and Asset Management 9.4 9.6
Global Capability Centres 9.3 9.4
Life Insurance 8.3 8.4
Life Sciences 9.5 9.6
Non-banking Financial Companies (NBFCs) 9.6 10.1
Real Estate/Infrastructure 10.3 9.8
Retail 8.9 9.4
Technology Consulting and Services 6.6 6.6
Technology Platform and Products 9.5 9.5
Wealth 9.2 9.4
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.
Alongside retention, employers are reshaping workforce strategies as AI becomes more deeply embedded in day-to-day work. Established 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. Workforce priorities are evolving in parallel, with talent premiums for AI, machine learning and data science roles increasing by approximately 10% from 2025.
“The rapid adoption of AI signals a shift from experimentation to enterprise-wide application. The next priority is translating that momentum into measurable productivity and growth. Employers that establish credible baselines, identify the capabilities that create differentiated value and align workforce investment accordingly will be best placed to realise AI’s full potential,” added Chaudhary.
Workforce priorities are evolving alongside the payroll implications of the Wage Code. While 65.4% of employers are already compliant and a further 20.9% expect to be ready within six months, 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. “Employers need to assess the workforce and cost implications, align any changes to cost to the company with their rewards philosophy and communicate the transition clearly. Early action will help organisations maintain pay competitiveness and workforce trust. With Wage Code implementation, AI investment and changing skill requirements all shaping workforce costs, organisations will need to be increasingly deliberate about where they invest in talent.”
More information about Aon in India can be found here.
