NEW DELHI: A recent study by Aon, a global professional services firm, predicts a 9% salary increase across India by 2026, primarily fueled by robust growth in the real estate and non-banking financial company (NBFC) sectors.
Driving Talent Demand: Real Estate and Infrastructure
The real estate and infrastructure sectors are expected to see significant salary increases of 10.9% in 2026, slightly up from 10.5% in 2025. This growth is attributed to government capital investments, real estate market recoveries, and increasing institutional involvement.
Roopank Chaudhary, a partner at Aon, stated that investments in infrastructure and policy reforms are boosting hiring. “Real estate and NBFCs are leading talent investments as organizations align compensation strategies for growth and workforce stability,” he noted.
Cautious Optimism in Other Sectors
NBFCs are expected to experience an average salary increase of 10% in 2026, leading among financial institutions, followed closely by asset management firms with 9.5%, and banking with 8.6%. Other sectors, including retail (9.6%), life sciences (9.6%), and engineering design services (9.7%), are also likely to see substantial pay growth.
However, technology consulting and services are projected to have more modest increases of 6.8%, due to efficiency measures and global challenges.
Amit Kumar Otwani, associate partner at Aon, remarked, “Organizations are cautiously optimistic, setting reasonable salary budgets while balancing performance-based increments and the need to retain critical talent.”
Decline in Attrition Rates
India’s overall attrition rate has decreased to 17.1% in 2025, the lowest in five years, down from 17.7% in 2024 and 18.7% in 2023. Involuntary exits have seen a slight rise to 4.6%, as companies focus on performance-driven workforce restructuring. This trend is linked to enhanced employee engagement and stability, particularly in real estate, NBFCs, and automobile manufacturing sectors, which are investing in retention and skills development.
India’s Competitive Edge
India continues to stand out globally, with one of the highest projected salary increases (9%) among major economies in 2026. Comparatively, the U.S. and Germany are expected to see average raises of approximately 4.3% and 3.9%, respectively. Aon attributes India’s strong labor market to domestic consumption, fiscal incentives, and relatively low inflation, even amid slowing global growth.
Strategic Workforce Planning Shift
Companies are transitioning from “just-in-time” to “just-in-case” workforce models to enhance resilience against trade and supply chain disruptions. There is a growing integration of AI and automation in operations, which is streamlining job roles and reducing long-term labor costs.
Outlook
Aon forecasts that organized sectors—especially real estate and financial services—will continue to lead in salary increases. With improved retention, moderated inflation, and targeted rewards, companies are shifting from aggressive hiring to strategic workforce consolidation, aiming to ensure productivity and profitability in FY26 and beyond.
