Indian workforce to receive average salary hike of 10.4% in 2023

Despite global macroeconomic conditions and rising inflation, salaries in India are likely to increase by 10.4 per cent on average in 2023, compared to an actual increase of 10.6 per cent to date in 2022, a new report showed on Monday.

Moreover, the attrition rate for the first half of 2022 continued to be high at 20.3 per cent, only marginally lower than the 21 per cent recorded in 2021, thus retaining the pressure on salaries.

This trend is expected to continue for the next few months, according to global professional services firm Aon.

"Despite the global recessionary headwinds and volatile domestic inflation, salary increases projected in India for 2023 are in the double digits," said Roopank Chaudhary, partner, Human Capital Solutions at Aon in India.

"Business leaders, however, must make decisions that ensure their workforce remains resilient today as well as into the future," Chaudhary added.

With an expected salary increase of 12.8 per cent, e-commerce leads sectors with the highest projected increase, followed by start ups at 12.7 per cent, hi-tech/information technology and information technology-enabled services at 11.3 per cent, and financial institutions at 10.7 per cent.

"As the broader economic circumstances impact the talent landscape, businesses must create holistic rewards strategies unique to their situation and sector to retain and attract the talent they need," said Jang Bahadur Singh, director, Human Capital Solutions at Aon in India.