Indian companies are likely to hand out higher average pay hikes of 9.1% in 2026 to their employees compared with 8.9% last year, according to a survey. Sectors like real estate/infrastructure and non-banking financial companies (NBFCs) are likely to offer the highest pay hikes of around 10%, according to findings from professional services firm Aon's Annual Salary Increase and Turnover Survey 2025-26 India.

The automotive and vehicle manufacturing, engineering design services, engineering and manufacturing, and retail industries are also projected to offer slightly higher than average salary hikes. The findings are based on data from more than 1,400 organizations across 45 industries.

According to the survey, attrition had slowed in 2025 to a five-year low of 16.2%. This reflects more targeted hiring practices and a greater emphasis on employee engagement, said Roopank Chaudhary, partner and rewards consulting leader, Talent Solutions for India, at Aon.

"Stronger salary growth in sectors such as real estate, NBFCs and manufacturing underscores employers' intent to invest in critical talent while building more sustainable compensation strategies", Chaudhary.

The 2025 attrition rate of 16.2%, compared with 17.7% in 2024 and 18.7% in 2023, was closer to pre-Covid levels.

A majority of them are planning CTC restructuring, and among those, most are opting for a hybrid approach increasing basic pay while adjusting allowances, according to Otwani.

About 15% of companies reported that their structures were already compliant with the codes, he said.