Corporate India is expected to offer an average salary increase of 9.1% in 2026, suggesting that pay hikes are settling into a more stable pattern after the sharp swings seen during and after the pandemic, according to the latest Future of Pay report by EY India.
The report studies salary trends and employee movement across industries and underlines how artificial intelligence (AI) is becoming central to talent and pay decisions.
GCCs SET TO OFFER HIGHEST HIKES
Global Capability Centres (GCCs) are likely to see the highest salary growth next year, with projected increments of around 10.4%. These centres continue to benefit from strong global demand and ongoing investments in digital and specialised skills.
The Financial Services sector is expected to follow with hikes of about 10%. E-commerce companies may offer around 9.9%, while Life Sciences and Pharmaceuticals could see increases of roughly 9.7%.
The broad trend suggests that sectors linked to technology, digital operations and global delivery models are likely to remain ahead in the pay race.
ATTRITION SHOWS SIGNS OF COOLING
There is also some relief for employers on the hiring front. Overall attrition fell to 16.4% in 2025, compared with 17.5% the previous year. While employees are still changing jobs, the pace has slowed slightly.
More than 80% of exits were voluntary, which means most people left for better opportunities rather than because of layoffs.
Financial Services reported the highest attrition at 24%, especially in sales, relationship management and digital roles. Professional Services, Hi-Tech and IT also saw relatively high employee movement. GCCs, however, recorded lower attrition at 14.1%, pointing to greater stability in these organisations.
AI CHANGING HOW COMPANIES REWARD TALENT
Artificial intelligence is playing a growing role in shaping compensation models. Around 50 to 60% of large organisations now use data analytics when planning salaries and bonuses. The use of AI in rewards and learning systems has also increased sharply in the past few years.
Roles in emerging technologies such as artificial intelligence, generative AI, machine learning and engineering can attract skill premiums of up to 40%. This reflects the high demand for specialised digital talent.
Overall, the report suggests that salary growth in 2026 may not be dramatic, but it is becoming more strategic. Companies appear to be moving towards a more measured and data-driven approach, while employees continue to seek clarity, fairness and growth opportunities in return for their skills.
