Particle.news
Download on the App Store

India Inc Set for 9% Pay Hikes in 2026 as Firms Shift Toward Bonuses and Skills-Based Pay

Employers pivot to performance-linked bonuses to balance cost control with retention.

Overview

  • Mercer India’s 2026 Total Remuneration Survey projects average salary increases of about 9% across more than 1,500 companies covering over 8,000 roles.
  • Manufacturing and engineering and the automotive sector are forecast to lead with roughly 9.5% hikes, while Global Capability Centres are expected around 9%.
  • Hiring intentions have cooled, with the share of organisations planning to add staff declining from 43% in 2024 to a projected 32% in 2026.
  • Attrition has eased sharply, with voluntary attrition falling from 13.1% in 2023 to 6.4% in H1 2025 and involuntary attrition dropping from 2.9% to 1.6%.
  • Mercer reports a redesign of rewards toward transparent, skills-based pay, and says some companies are narrowing increment eligibility as a cost-management step.