Corporate India Likely to Offer 9.1% Average Salary Hike in 2026; GCCs to Lead Pay Growth: EY India Report

Corporate India is projected to offer an average salary increase of 9.1 per cent in 2026, with Global Capability Centres emerging as the top paymasters, according to the latest “Future of Pay” report by EY India released on Monday.

The report signals sustained optimism in compensation trends, even as companies recalibrate talent strategies amid evolving business demands.

GCCs to Offer Highest Salary Increments at 10.4%​

Global Capability Centres, or GCCs, are expected to lead the salary growth cycle with projected increments of 10.4 per cent in 2026. The higher payouts are being driven by strong global demand for digital and technology capabilities, positioning GCCs as key drivers of compensation growth.

In comparison, the financial services sector is likely to see salary hikes of around 10 per cent. E-commerce follows closely with projected increments of 9.9 per cent, while life sciences and pharmaceuticals are expected to register average hikes of 9.7 per cent.

These projections underline the continued strength of technology-enabled and knowledge-intensive sectors in shaping India’s pay landscape.

Attrition Eases to 16.4% in 2025​

The report also highlights a gradual cooling in attrition levels, pointing to improved workforce stability. Overall attrition declined to 16.4 per cent in 2025, down from 17.5 per cent in 2024.

Despite the moderation, voluntary exits continue to dominate workforce movement. More than 80 per cent of employee departures remain voluntary, indicating that job switches are largely driven by better opportunities rather than layoffs.

Sector-wise, financial services recorded the highest attrition at 24 per cent. Professional services as well as high-tech and IT sectors also reported elevated attrition levels. In contrast, GCCs posted relatively lower attrition at 14.1 per cent, reflecting comparatively stronger talent retention.

Shift Towards Skills-Based Compensation​

According to Abhishek Sen, Partner and Leader, Total Rewards, HR Technology and Learning at EY India, companies are rethinking their approach to talent investment.

The report points to a structural shift towards skills-based compensation models. Nearly half of the surveyed organizations are transitioning from traditional role-based pay structures to skill-based frameworks.

Professionals with expertise in artificial intelligence, generative AI, machine learning, cybersecurity, and cloud computing are commanding salary premiums of 30 to 40 per cent. These capabilities are increasingly seen as critical to long-term business growth.

Variable Pay Gains Prominence​

Variable compensation is also playing a larger role in overall pay structures. The average variable pay as a share of fixed salary rose to 16.1 per cent in 2025, compared to 14.8 per cent in the previous year.

The findings indicate that the future of pay in India is moving beyond standard annual increments, with a sharper focus on rewarding in-demand skills, aligning incentives with performance, and maintaining long-term sustainability in compensation strategies.