Average hike in India

Average hike in India to be around 8.8% in 2025'

Extract from the article:

The latest Deloitte report presents a sobering forecast for salary increments in India, predicting an average pay hike of 8.8% in 2025, a decline from the 9% rise expected in 2024. This marks the lowest wage growth in nearly a decade, save for the anomalous year 2020, which was overshadowed by the global pandemic’s economic disruptions. The report highlights persistent macroeconomic headwinds such as inflationary pressures, geopolitical uncertainties, and tempered economic growth that are converging to restrain salary hikes across sectors.

These subdued increment predictions underscore the complex interplay between corporate fiscal prudence and employee expectations in a changing economic environment. While wage growth remains positive, it is tempered by cautious optimism among employers who must balance talent retention against operational cost constraints. Consequently, salary increments are anticipated to be more conservative, a trend that could have ripple effects on consumer spending, employee morale, and overall economic vitality.

My Take:
A. Re: Getting Feedback from Workers

Reflecting on the wage increment discussion from my 2024 blog, I find the Deloitte report’s forecast intriguingly aligned with the nuanced dynamics we explored back then. In that blog, I recalled an employee survey from 1983 employing conjoint analysis to dissect how workers weigh different components of their wage package—basic salary, DA, HRA, LTA, reimbursements, and retirement benefits. This analysis revealed diverse priorities based on demographics and skill levels, reminding us that “a pay hike” isn’t a monolith but a composite of valued elements.

The present pay raise projections reinforce this multifaceted reality. With increments becoming modest, employers must strategically structure compensation beyond mere headline salary numbers to address workers’ varied priorities. This deep-seated insight that wage satisfaction hinges on more than just the percentage increase is ever relevant now. I often think that had more companies factored in such granular employee preferences decades ago, the current period of cautious increment might have been navigated with greater workforce contentment.

B. Any Paying Job is Better than No Job 

This blog, penned amidst pandemic upheavals, argued the necessity of flexibility in employment terms and compensation as businesses and workers negotiated survival. It called for pragmatic acceptance of lower wages, frozen increments, and job fluidity to keep the economic engine running. The Deloitte report’s tempering of pay hikes toward 8.8% echoes these sentiments, albeit in a less extreme scenario than early 2020.

Revisiting those ideas, I realize the pandemic set a precedent for realistic compensation adjustments during crises, informing current corporate caution. The call to “scrap rigid job descriptions” and embrace adaptable terms remains prophetic: as increments shrink, the ability to reimagine work relationships and compensation models will define organizational resilience. This blog’s emphasis on collaborative negotiation between employers, labor unions, and policymakers is more relevant than ever to craft wage strategies that protect livelihoods without crippling enterprises amid economic headwinds.

Call to Action:
To all corporate HR leaders, labor union representatives, and economic policymakers, I urge you to engage proactively in transparent dialogue regarding wage structures and increments. Recognize that while 8.8% hike forecasts indicate restrained growth, this juncture is an opportunity to innovate compensation packages—incorporating flexible benefits, personalized allowances, and career development incentives that address workers’ diverse priorities. Let us collaborate to create wage frameworks that not only ensure fair rewards but also foster employee engagement and economic sustainability in these challenging times.

With regards, 

Hemen Parekh

www.My-Teacher.in