India Inc. likely to see 9.1% salary hike in 2026; GCCs lead with 10.4%: EY
ADVERTISEMENT
Corporate India is likely to witness an average salary increase of 9.1% in 2026, with Global Capability Centres (GCCs) emerging as the top paymasters, according to the latest Future of Pay 2026 report by EY India.
The report projects salary increments of 10.4% for GCCs next year, the highest among sectors, driven by sustained global demand for specialised digital and technology capabilities. The financial services sector is expected to follow with around 10% growth while e-commerce (9.9%) and lifesciences and pharmaceuticals (9.7%) also rank among the better-performing sectors.
Attrition moderates across sectors
At the same time, overall attrition has shown signs of moderation. Workforce churn declined to 16.4% in 2025 from 17.5% in 2024, indicating gradual stabilisation in hiring conditions. More than 80% of exits remain voluntary, suggesting job switches continue to be opportunity-led. Financial services reported the highest attrition at 24%, followed by professional services (21.3%) and hi-tech and IT (20.5%). GCCs, in contrast, recorded relatively lower attrition at 14.1%.
Commenting on the findings, Abhishek Sen, Partner and Leader, Total Rewards, HR Technology and Learning, People Consulting, EY India, said, “We are at a turning point in how organisations think about investing in their people. The future of pay in India is no longer defined by the size of the annual increment alone. It is increasingly about precision – deciding which skills to invest in, which outcomes to reward, and how to balance competitiveness with sustainability. Rewards strategies are becoming more deliberate, with sharper differentiation and better use of data to guide decisions.”
Skills-based pay and variable rewards gain traction
The study highlights a clear move towards skills-based compensation. Nearly half of surveyed organisations are shifting from role-based to skill-based pay models. Emerging technology roles in AI, machine learning, cybersecurity, and cloud engineering are commanding premiums of up to 30–40%.
Variable pay is also gaining weight, rising to 16.1% of fixed pay in 2025 from 14.8% a year earlier. Top performers are earning up to 1.6 times more through differentiated incentives, reflecting a sharper focus on pay-for-performance in an increasingly AI-driven workplace.