Aon’s Annual Salary

Increase and
Turnover Survey
2023

India Insights Report

October 13, 2023

Table of Contents
1. Aon’s Talent Solutions

2. Aon’s Salary Increase and Turnover

Survey

3. Global Snapshot

4. India Highlights

5. Aon Perspectives

6. Pay Practices

7. Industry Dashboards
• Consumer
• Financial Services
• Global Capability Centers
• Life Sciences
• Manufacturing
• Services
• Technology

8. Core Research Team

1
1. Aon’s Talent Solutions

2
Aon is in the Business of Better Decisions

Aon exists to shape decisions We are helping clients solve

for the better – to protect and increasingly complex and
enrich the lives of people rapidly changing challenges
around the world. across four areas of need:

50,000
colleagues around the world
Navigating
new forms of
volatility
Building
a resilient
workforce

120+
countries with Aon clients
Rethinking
access
to capital
Addressing
the
underserved

3
How Aon’s Talent Solutions Help You
Data, analytics and advice to help you make better workforce decisions

Better Informed Better Advised Better Decisions

Uniquely placed to bring you the Whatever your challenges, we Combining unique insight and
insights you need, with the right tailor advice to fit your needs. advice driven by unparalleled
level of detail, to meet your We help you attract, retain, and data, we empower you to
workforce challenges. sustain your workforce. understand your workforce.

Helping organizations make better workforce decisions to grow and transform

businesses, communities and individuals.

4
Making Better Workforce Decisions Informed by Data
Data points which drive workforce and people insights

Workforce Data People Data Industry Data

Insights, dashboards and Data on behaviours, Benchmarks by sector

decision-making tools motivations, skills and analysing rewards,
drawing on rewards, capabilities collected using performance, and skills
performance, location and patented talent across a plethora of roles
DE&I metrics assessment tools and job titles

Industry
22M+ 3,500 35,000 30M+ 90 42 7,500+ 1,800+ expertise
Employee Data, analytics Executive People Countries Languages Organizations Technology Industry
data points and advisory roles covered assessed where available for participating firms included insights and
globally clients per year assessments our tools globally future trends
are conducted

One of the key differentiators of our Human Capital business at Aon is our data. This allows us to generate truly data-driven insights to
deliver better workforce strategies and solutions. Our data is global and spans the workforce, individual/people data, and industries.
Here are some of the key data points we analyse. 5
Aon Leadership

Nitin Sethi Roopank Chaudhary Anirban Gupta

Partner and Chief Executive Partner and India General Partner and India
Officer, South Asia Industry Leader Technology Industry Leader

Surya Shekhar De Pritish Gandhi Shilpa Khanna

Associate Partner and India Associate Partner and India Practice Associate Partner and India
Financial Institutions Leader Leader - Executive Compensation HR Advisory Leader

6
2. Aon’s Salary Increase
and Turnover Survey

7
Aon’s Annual Salary Increase and Turnover Survey
2023
The most definitive source of Talent and Rewards trends for
India Inc.

29th 1000 39
Year running Organizations covered Sectors covered

This year the survey goes global. Aon India’s SIS (Salary Increase Survey) is
now integrated with Aon’s Global SITS (Salary Increase and Turnover study).
This synergistic change is aimed at bringing you:
• Talent trends from around the world
• Insights around global impact on India business & talent landscape
• Differentiated talent practices in domestic and global firms

8
 Survey Highlights
Market Trend Our View

Salary Trends India will continue to lead the real wage

• 59% of organisations are expected to give double digit growth increases among the large
salary increases in 2024 economies on buoyed by robust growth
• 2023 (A): 9.4% | 2024 (P): 9.4% sentiment

Talent Segmentation
• Individual Performance remains top factor used to determine Continued pay differentiation to inculcate a
Individual Pay increases performance-based culture and attract &
• Differentiated merit budget for Hi-Po, Top performers and retain key talent
Critical/key positions

Turnover
• Slowdown in overall Turnover accompanied with a rise in
involuntary Turnover. 45% of voluntary turnovers are
regrettable.
• Overall Turnover: 17.5% | Involuntary: 6.4%
Retention measures are geared towards
increasing internal equity, work-life balance,
manager feedback

Focus on Total Rewards

• 58% of organizations are investing in ways to improve the Renewed focus on and investment in Total
employee experiences, inclusive of benefits and best Rewards and building personalization
practices

Source: Aon’s Global Salary Increase and Turnover Survey 2023

3. Global Snapshot

10
 Global Business & Talent Outlook (1/4)
North America

Salary Salary
GDP 2024 Inflation Inflation Turnover
Country Increase Increase GDP 2023
(P) 2023 2024 (P) 2023
2023 2024 (P)

Canada 4.2 4.3 1.3 1.6 3.6 2.4 19.2

United States 5.0 4.8 2.1 1.5 4.1 2.8 23

Latin America
Salary Salary
GDP 2024 Inflation Inflation Turnover
Country Increase Increase GDP 2023
(P) 2023 2024 (P) 2023
2023 2024 (P)

Argentina 55.2 59.7 -2.5 2.8 121.7 93.7 20.7

Brazil 5.5 5.9 3.1 1.5 4.7 4.5 18.3
Mexico 5.9 5.7 3.2 2.1 5.5 3.8 22.5

The federal funds rate in USA rose from close to zero in March 2022 to
5.5% currently, the highest ever since 2001. If the trend is sustained,
there is a chance to see salary increases closed to those of developing
markets.

The 2% inflation target set by the Federal Open Market Committee

entails two-sided risks: tightening policy too little or too much. The
former will render continuous high inflation and the latter puts
economic growth at risk. Such a scenario playing out may temper
salary increases, thereby squeezing real wage growth.
GDP (Real) and Inflation: IMF Data Mapper October 2023; 11
Salary increase: Aon’s Global Salary Increase and Turnover Survey 2023
 Global Business & Talent Outlook (2/4)
Western Europe

Salary Salary
GDP 2024 Inflation Inflation Turnover
Country Increase Increase GDP 2023
(P) 2023 2024 (P) 2023
2023 2024 (P)

Austria 4.4 4.4 0.1 0.8 7.8 3.7 11.1

Belgium 5.2 4.7 1.0 0.9 2.5 4.3 13.5
Denmark 3.8 3.9 1.7 1.4 4.1 2.8 15.7
Finland 3.4 3.6 -0.1 1.0 4.5 1.9 13.3
France 4 4.1 1.0 1.3 5.6 2.5 13.9
Germany 4.2 4.3 -0.5 0.9 6.3 3.5 14.7
Ireland 4.2 4.3 2.0 3.3 5.2 3.0 18.7
Italy 3.9 4.1 0.7 0.7 6.0 2.6 11.1
Netherlands 4.3 4.4 0.6 1.1 4.0 4.2 16.8
Portugal 3.8 3.9 2.3 1.5 5.3 3.4 15.5
Spain 4.3 4.2 2.5 1.7 3.5 3.9 13.7
Sweden 3.8 3.9 -0.7 0.6 6.9 3.6 15.6
United
5 4.8 0.5 0.6 7.7 3.7 20.1
Kingdom

Central and Eastern Europe

Salary Salary
GDP 2024 Inflation Inflation Turnover
Country Increase Increase GDP 2023
(P) 2023 2024 (P) 2023
2023 2024 (P)

Hungary 7.3 7.4 -0.3 3.1 17.7 6.6 19.8

Poland 6.2 6 0.6 2.3 12.0 6.4 17.1
Romania 6.5 6.6 2.2 3.8 10.7 5.8 19.7
Russia - - 2.2 1.1 5.3 6.3 -
Turkey 35.9 35.8 4.0 3.0 51.2 62.5 20.5
GDP (Real) and Inflation: IMF Data Mapper October 2023; 12
Salary increase: Aon’s Global Salary Increase and Turnover Survey 2023
 Global Business & Talent Outlook (3/4)
Asia Pacific

Salary Salary
GDP 2024 Inflation Inflation Turnover
Country Increase Increase GDP 2023
(P) 2023 2024 (P) 2023
2023 2024 (P)

Australia 4.1 4.1 1.8 1.2 5.8 4.0 20.3

Bangladesh 7.7 7.5 6.0 6.0 9.0 7.9 -
China 5.7 5.8 5.0 4.2 0.7 1.7 16
South Korea 4.5 4.6 1.4 2.2 3.4 2.3 13.7
Hong Kong 4.0 4.2 4.4 2.9 2.2 2.3 20.8
India 9.4 9.4 6.3 6.3 5.5 4.6 17.5
Indonesia 6.2 6.4 5.0 5.0 3.6 2.5 18.1
Japan 3.3 3.5 2.0 1.0 3.2 2.9 13.3
Malaysia 5.3 5.2 4.0 4.3 2.9 2.7 18.6
Philippines 5.7 5.8 5.3 5.9 5.8 3.2 20
Singapore 4.6 4.6 1.0 2.1 5.5 3.5 19.6
Thailand 5.0 5.0 2.7 3.2 1.5 1.6 16.8

Middle East
Salary Salary
GDP 2024 Inflation Inflation Turnover
Country Increase Increase GDP 2023
(P) 2023 2024 (P) 2023
2023 2024 (P)

Qatar 4.1 4.0 2.4 2.2 2.8 2.3 -

Oman 3.4 3.8 1.2 2.7 1.1 1.7 -
Saudi Arabia 4.6 4.7 0.8 4.0 2.5 2.2 18.4
United Arab
4.6 4.5 3.4 4.0 3.1 2.3 14.0
Emirates
GDP (Real) and Inflation: IMF Data Mapper October 2023; 13
Salary increase: Aon’s Global Salary Increase and Turnover Survey 2023
 Global Business & Talent Outlook (4/4)
Sub-Saharan Africa

Salary Salary
GDP 2024 Inflation Inflation Turnover
Country Increase Increase GDP 2023
(P) 2023 2024 (P) 2023
2023 2024 (P)

Ivory Coast 4 3.9 6.2 6.6 4.3 2.3 -

Ghana 9.6 11 1.2 2.7 42.2 23.2 -
Malawi - - 1.7 3.3 27.7 19.8 -
Kenya 6.2 6.5 5.0 5.3 7.7 6.6 -
Nigeria 8.4 9.0 2.9 3.1 25.1 23.0 -
South Africa 6.3 6.2 0.9 1.8 5.8 4.8 17.5
Uganda 7.1 8.5 4.6 5.7 5.8 4.7 -
Zambia 7.7 10.1 3.6 4.3 10.6 9.6 -

North Africa

Salary Salary
GDP 2024 Inflation Inflation Turnover
Country Increase Increase GDP 2023
(P) 2023 2024 (P) 2023
2023 2024 (P)

Egypt 10.7 12.4 4.2 3.6 23.5 32.2 -

Morocco 4.5 4.3 2.4 3.6 6.3 3.5 -
Cameroon 3.5 3.2 4.0 4.2 7.2 4.8 -

The growth hub in Africa consists of countries like Nigeria, Egypt,

Ghana, Kenya, and South Africa which promise a host of opportunities
and positive business outlook. Other regions are either deserted or
affected by rainfall, thereby not rendering a positive business front.
Major Economies of the African union have been represented; 14
GDP (Real) and Inflation: IMF Data Mapper October 2023;
Salary increase: Aon’s Global Salary Increase and Turnover Survey 2023
4. India Highlights

15
 India at a Glance | Macroeconomic Trends
Overview of Salary Increases , Real Wage Growth, and GDP
High double digit Low double digit Single digits
14
12.6
11.7
10.7 10.2 10.4 10.4 10.2 10.6
10.3 9.5
9.3 9.3 9.3 9.4 9.4
9 8 8.3
7.4 9.1
6.6 6.4 6.8 6.5 6.1 6.8 6.3 6.3
5.5 5.5 5.7
4.6 6.1 4.5
5.7 3.8 3.7
4 3.1 4.8
3.9 3.9
1.2 0.8
0.7
-0.1
-1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023(A) 2024(P)

Salary Increase Real Wage Growth -5.8 GDP

-6

GDP Growth Inflation Unemployment

2023 | 2024 (P) 2023 | 2024 (P) September 2023

6.3 | 6.3 5.5 | 4.6 7.1

Although India GDP is growing and has a positive forecast, the trickle-down effect of recession and low growth in major world
economies is observed in India. As such there is an observed moderation in salary increase compared to previous year.

Note: The 2023 and 2024 (P) Overall India salary increase data is based on 634 responses from phase 1 data collection (Global survey – July 2023). The industry-specific
salary increase numbers include 1000 responses from phase 1 data collection and a phase 2 data collection (India survey – Aug 2023). Thus, the industry-specific salary
increase numbers may not summate up to Overall India salary increase numbers. This alignment will be built in the December SITS release.
16
Source: IMF Data Mapper October 2023; Aon’s Salary Increase and Turnover Study 2023; CMIE
Numbers reported are including 0s and in %
 Sector-wise Increment Numbers
Represented as 2022 | 2023 | 2024 (Projected)
2024 2024 2024
Industry / Sector 2022 2023 Industry / Sector 2022 2023 Industry / Sector 2022 2023
Projected Projected Projected
Financial Institutions 10.9 10.6 10.2 Technology Platform &
Aerospace & Defense 9.3 9.5 10.5 11.6 10.0 9.8
Products
Banking 10.2 9.8 10.3
Automotive 10.1 10.5 9.8 Fintech 11.1 10.8 10.3
Investment Banking 11.2 10.7 9.3
Engineering Design Consumer Tech 12.0 9.5 9.1
- 10.2 10.0
Services Wealth Mgmt. 11.6 11.5 10.0
Cloud Platform 12.8 10.2 10.0
Engineering/Manufacturing 9.7 10.5 10.1 Funds/ Asset
11.7 10.2 10.1
Management ICT 11.4 9.8 9.5
Chemicals 9.6 9.6 9.6
NBFC 11.5 10.4 10.8
Enterprise Product 11.4 10.1 10.0
Energy
9.5 8.5 8.8 Housing Finance - 10.9 11.0
(Oil/Gas/Renewables) Semiconductors 12.1 10.4 10.6
Micro Finance - 11.6 11.9
Other Manufacturing - 9.3 9.0 Global Capability Centers 11.1 10.5 10.1
Life Insurance 9.1 8.8 8.6
FMCG/FMCD 9.5 9.7 9.8 Retail and Supply
11.1 9.8 9.6
General Insurance/ Chain GCC
10.0 10.8 11.1
Reinsurance
Durable 9.3 10.1 10.0 Healthcare GCC 10.1 9.2 8.9
Fintech 11.1 10.8 10.3
BFSI GCC 11.4 10.8 10.3
Non-Durable 9.5 9.3 9.6
Retail (incl. Wholesale &
9.9 10.1 10.1 ER&D GCC 10.6 10.7 10.7
Distribution)
Life Sciences 9.8 9.8 9.7
Telecommunications Professional Services
9.9 8.6 8.9 12.2 11.5 10.6
Services GCC
CRO 10.6 10.1 10.6
Technology Consulting &
Entertainment & Media 10.6 9.4 8.8 10.9 9.9 9.5
Services
Pharmaceutical 9.2 9.7 10.2
Professional Services 12.4 9.4 10.5 Application Services 11.4 9.9 9.5
Medical
10.3 9.9 9.6 E-Commerce 13.7 10.1 10.7 Third Party Services 9.8 9.9 9.7
Technology
Note: The 2023 and 2024 (P) Overall India salary increase data is based on 634 responses from phase 1 data collection (Global survey – July 2023). The industry-specific
salary increase numbers include 1000 responses from phase 1 data collection and a phase 2 data collection (India survey – Aug 2023). Thus, the industry-specific salary
increase numbers may not summate up to Overall India salary increase numbers. This alignment will be built in the December SITS release. 17
Source: Aon Salary Increase and Turnover Study 2023
Numbers reported are including 0s and in %
 Variation within Industries
Dispersion of 2024 (P) Salary Increases

Maximum Dispersion Minimum Dispersion

Life Sciences 8.4% 10.0% 11.1% 2.8%

Global Capability Centers 5.5% 10.0% 14.0% 8.5%

FMCG/FMCD 8.8% 9.8% 11.7% 2.9%

Tech Platforms & Products 5.0% 10.0% 13.2% 8.2%

8.2% 11.0% 11.5% 3.3%

Retail
Technology Consulting 5.6% 10.0% 12.8% 7.2%
and Services
Chemicals 8.2% 9.7% 11.8% 3.7%

Financial Institutions 8.0% 10.0% 15.0% 7.0%

Entertainment 6.2% 9.3% 10.5% 4.3%

and Media

10th Percentile 50th Percentile 90th Percentile Dispersion (P90- P10)

There is a significant dispersion in the salary increase across companies across Technology Sector and Capability Centres – as we see a
divergence in business strategies with some companies still gunning for growth and others focusing on profitability and thus trimming employee
costs. The manufacturing and consumer space has a more convergent set of salary increase points across companies. 18
Source: Aon Salary Increase and Turnover Study 2023
India at a Glance | Turnover Trends
21.0 21.4
18.9 19.8 19.3 18.5 18.1 17.5
16.3 16.4 16.3 15.8 16.1
12.8
10.3
6.4
4.4 4.2 5.1 4.4
3.7 3.9 3.9 3.3 3.4 3.5 3.9
2.1

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

India Manufacturing Services Regrettable Turnover

45%
17.5 | 6.4 | 21.4 14.7 | 2.7 | 15.7 20.5 | 2.3 | 18.4 of Voluntary Turnover
2023 2023 2022
Overall Turnover Involuntary Turnover Overall Turnover

The Turnover trend is mirroring 2010-2011 where Turnover stood at 19%+ when the nation was coming out of the subprime crisis and
businesses were on a ramp up phase. Involuntary Turnover stands at 6.4% primarily driven by layoffs in IT and start-up space where
companies are trying to realign their business models. As businesses look to consolidate, focus on managing employee costs and as talent
demand saturates, we anticipate a slow decline in Turnover over the next 2-3 years.
Source: Aon Salary Increase and Turnover Study 2023;
19
Regrettable turnover is defined as loss of an employee whose positive impact on the organization is missed
Numbers reported are including 0s and in %
 Turnover Analysis by Industry 2022 | 2023
Overall Overall Voluntary Involuntary Overall Overall Voluntary Involuntary Overall Overall Voluntary Involuntary
Industry / Sector Turnover Turnover Turnover Turnover Industry / Sector Turnover Turnover Turnover Turnover Industry / Sector Turnover Turnover Turnover Turnover
2022 2023 2023 2023 2022 2023 2023 2023 2022 2023 2023 2023
E-Commerce 24.0 18.9 16.8 2.1 Technology Platform &
Chemicals 15.0 11.2 9.7 1.4 18.1 17.9 12.6 5.3
Products
Entertainment & Media 24.9 20.5 17.0 3.5
Fintech - 18.0 14.0 4.0
10.2 11.2 9.1 2.1 Professional Services 24.0 26.3 24.8 1.5
Automotive
Consumer Tech 9.0 17.8 11.2 6.6
Financial Institutions 29.1 30.4 24.2 6.2
Aerospace & 11.0 13.6 12.9 0.7 Banking 26.6 29.3 25.9 3.4 Cloud Platform 10.0 18.2 15.3 2.9
Defense
Investment 18.2 22.5 16.2 6.3 ICT 18.6 16.6 13.4 3.2
Engineering/ Banking
10.4 21.3 16.7 4.6 Enterprise
Manufacturing Wealth 19.6 19.9 13.7 6.2
17.7 28.2 23.4 4.8 Product
Management
Engineering - 18.6 16.8 1.8 Semiconductors 14.2 14.9 10.3 4.5
Funds/Asset 19.5 9.3 8.8 0.5
Design Services
Management
Global Capability 19.5 17.0 14.0 3.0
Energy (Oil/Gas/ NBFC 29.7 47.8 43.3 4.5 Centers
13.6 21.9 19.1 2.8
Renewables) Housing Retail & Supply
- 40.6 37.9 2.7 17.1 16.6 15.0 1.6
Finance Chain GCC
Other - 12.1 9.6 2.5
Manufacturing Micro - 62.9 58.0 4.9 Healthcare GCC 21.3 17.6 13.5 4.2
Finance
50.4 55.9 46.3 9.6 BFSI GCC 20.3 15.1 12.5 2.6
FMCG/FMCD 18.0 18.7 16.9 1.7 Life Insurance
General ER&D GCC 18.2 15.3 13.2 2.1
17.5 16.6 15.7 0.9 Insurance/ 30.2 32.7 21.4 -
Durable Professional
Reinsurance 21.7 22.6 17.8 4.8
Services GCC
Non- Fintech - 18.0 14.0 4.0
18.7 20.1 17.9 2.2 Technology Consulting
Durable 24.1 20.4 18.1 2.3 27.3 21.7 15.0 6.7
Telecommunications & Services

Life Sciences 18.7 15.1 13.1 Retail (incl. Wholesale & 20.4 - - - Application
2.0 25.5 21.1 14.7 6.4
Distribution) Services

Source: Aon Salary Increase and Turnover Study 2023 20

Numbers reported are including 0s and in %
Voluntary & Involuntary Turnover figures are normalized to add up to Overall Turnover
5. Aon Perspectives

21
Divergence in Salary Increments by Headquarters

USA Europe India

Salary Increase
9.4 10.2 10.8
Actual 2023
Salary Increase
9.4 9.5 11
Budget 2024 (P)
GDP Growth 2024 (P) +1.5% +1.4% +6.3%
YoY EPS Change
-0.1% +6.7% +18.7%
2024 (P)

The Salary Increments for India workforce of the companies headquartered abroad show a strong correlation to the
relative Macroeconomic fundamentals (% GDP growth) and Corporate Performance (% EPS change) of the home
country. This differentiation supersedes the base increase which is determined by India business sentiment and local
talent dynamics.

Earnings per share can be defined as a company's net earnings or losses attributable to common shareholders per diluted share base, which includes all convertible securities and
22
debt, options and warrants. EPS numbers are for 2023 (last 12 months) – S&P500, Euronext, Nifty; GDP increment numbers from European commission and IMF October Refresh
China+1 Story: An Upswing for Neighboring Economies
Real Wage Growth

4.8% 5.1%
4.6% ⬆
4.0% 4.1% 3.9%
3.5% 3.6%
2.8% ⬆ ⬌
2.3%
3.0%
⬇
2.0%
2.1%

0.0%
2022 2023 2024 (P)
-2.0% -1.4%
Vietnam Thailand China India

China Plus One: The Macroeconomic Trend Aon’s View

The business strategy to avoid investing only
in China and diversify business into other
countries, or to invest in manufacturing in
other promising developing economies.
The real wage growth numbers (Overall Manufacturing) have shown
an uptick in economies like India, Vietnam and Thailand whilst
showing a dip in the increment numbers of China. The impact of
China Plus one policy is positive on the real wage growth numbers
in sub-continent which bodes well for the economy.

23
Recessionary Environment Leading to a Slump for Start-Ups Globally
Global Venture Funding
$200 12,000 Funding Winter
10,260 11,081
$180 -60% YoY
9,086
10,503 11,000 ▪ Global Venture Funding continues to slide in Q1’23.
Funding
$160 9,684 10,000 ▪ Unicorn Birth Rate is at its lowest in 6 years with just 13 unicorns
9,091
$140 8,757
9,000 emerging in Q1.
$120 7,986
8,000 ▪ Quarterly IPOs fall by 47%, hitting their lowest in almost a decade.
$100 7,024
7,000
$80
6,000
$60
$40 5,000 People and Pay
$20 4,000
$141 $156 $166 $181 $151 $118 $82 $67 $59 ▪ Limited or No Salary Increases as start-ups prioritize conserving
$- 3,000
cash and extending their runway.
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
▪ Equity and Non-monetary Incentives: Startups facing funding
constraints may offer equity or stock options to compensate for
Impact on Talent Across Stages limited salary increases.
▪ Turnover Risk: A lack of salary increases during a funding winter
25 can increases the risk of employee Turnover.
20.4
20 18.2
15.6
15 12.8
10.3 10.5 11.2
10 8.1 Aon’s View
5
▪ Mid-Stage Slowdown - Series B, C, and D to be impacted the most.
0
Early Stage Mid Stage Late Stage Large Firms
▪ Selective Increases: Some startups may choose to provide
selective salary increases to key employees who are critical to the
Salary Increase Attrition company’s success.

24
6. Pay Practices

25
Talent Segments
Organizations Segmenting their Talent Groups
High Potentials Top Performers Critical Talent/Key Positions
81%
63% 66%

37%
34%

19%

Yes No Yes No Yes No

Merit Increase Ratio: Organizations Using a Separate Merit Budget

Talent Group Average to Overall Employee Average for Talent Groups

Critical Talent/
37% 35% 22% 5% 4%
Key Positions Critical Talent / Key Positions

Top Performers 10% 50% 32% 7%

7% Top Performers

High Potentials 25% 47% 23% 5%

3% High Potentials
1x 1.5x 2x 2.5x High ratio (more than 3x)

Source: Aon Salary Increase and Turnover Study 2023 26

Performance Management
Prevalence of Performance Management Systems Performance Rating Scale Prevalence
2%
6% 6% 11% 14%
8%
8% 8%
16%
58% 54%
52% 44%
Yes

No 20% 19% 19%

17%
14% 13% 11% 14%
84%
2020 2021 2022 2023
3-point scale 4-point scale 5-point scale Other scales No Rating Scale

Typical Performance Management Approach

Other 1%
Performance Management Systems and Objective
Rating Scales are highly prevalent, but there is a
trend of organisations moving away from the
Informal review 5% prevalent a 5-point rating scale.

Formal review without a formal In absence of traditional performance differentiation

13%
rating communicated to employees through a bell-curve firms use continuous feedback
and 9-box models as prevalent alternatives
Formal review with a formal rating
81%
communicated to employees

Source: Aon Salary Increase and Turnover Study 2023 27

Deep dive on Salary Increases
Typical Performance Management Approach

8.1
6.9 8.2
8.1 7.7 7.8 Merit
4.7

2.4 2.8 Non Merit

1.4 1.6 1.4 1.3
1.2

2018 2019 2020 2021 2022 2023 (A) 2024 (P)

Typical Reasons for Awarding Special Adjustment to Salaries

Market Adjustments (External Equity) 81% Usually in India the performance linked Merit
Increase is the major driver of increments.
Retention / Counteroffers 79%
However, firms in today’s volatile talent
environment are increasingly reliant on
Internal Equity 62% Special Adjustments which are granted to
employee(s) for unique situation which is
Hot Skills & Promotions 46% most usually not covered by merit,
promotional, or across-the-board increase.
Gender Equity / Parity Adjustments 45%

Source: Aon Salary Increase and Turnover Study 2023 28

 Salary Increase
Pay Review Frequency Factors Influencing Salary Increase Budget Recommendations
92%
83%
8%
9% 63% 58% 54%
Annually

As Needed/
Informal
83%
Semi-Annually
Salary surveys of Organization's ability Economic conditions Organization's Organization's current
competitive salary to pay (financial (e.g., inflation, employee position to salary increase budget
increase budgets performance vs plan) unemployment) market

Approaches to determine Salary Increase Decisions Key Factors Used to Determine Individual Pay Increases
26% Executive management reviews manager recommendations 94%
78% 73%
72%
Compensation department reviews manager 67%
25% 59%
recommendations
Compensation department recommends increase award,
23%
but manager determines amount
Managers decide individual pay rates with budget 11%
14%
guidelines
Compensation department recommends increase award, Individual Position in Pay to market Pay to peers Manager Retention risk Cost-of-living
10%
managers can exceptions performance salary range (external (internal discretion adjustment
Compensation department /executive /algorithm decides equity) equity) within budget
2%
the increase
Source: Aon Salary Increase and Turnover Study 2023 29
 Salary Cycle
Month When Finalized Month When Effective Lead Time To Implement

Jan Jan 5 Months 13%

Dec 13% Feb Dec 12% Feb
15% 10% 8%
Nov Mar Nov Mar 4 Months 14%
14% 13%
3 Months 18%
Oct Apr Oct Apr
11% 26% 2 Months 9%

Sep May Sep May 1 Month 42%

Aug Jun Aug 9% Jun Same

3%
Jul Jul Month

Vast majority of organisation plan their salary budget decisions are finalized between the months of October and February (of the next calendar year).
The month of April has the maximum increases effective, owing to the start of the new financial year.

Source: Aon Salary Increase and Turnover Study 2023 30

Promotions
Promotion Budget Promotions

44%
1.5%
1.3%
21%
17% 18%

One Formal Cycle per Primarily Limited to Pay Promotions can Happen Two Formal Cycles per
Year Administration Season at any Time Year
but Exceptions can
2023 2024 (P)
Happen

Salary Increase when Moving Laterally

Results in a salary increase smaller than a typical promotional increase 43%

Results in a salary increase of a similar size to a promotional increase 6%
Lateral job change would typically NOT result in a salary increase 51%

While firms are increasingly targeting internal job movements to satisfy employee career aspirations, however, these lateral job changes do
not accrue a salary increase in half of the cases, and when they do, the increase does not level up to a promotional increase.

Source: Aon Salary Increase and Turnover Study 2023 31

7. Industry Dashboards

32
Consumer
Business Drivers
Industry Snapshot
Salary Increase ▪ Companies are bringing together suppliers, inventory management,
25 Merit and distributor management within one ecosystem and using
2024 (P) 8.6 1.2
20 17.4 18 18.7 technologies like AI, Big Data and Predictive Analytics to predict
15.1 14.5 2023 8.4 1.3 Non- shopper behaviours.
15 Merit
9.6 9.5 9.7 9.8 ▪ Direct-to-consumer is turning out to be another preferred business
10 8.7
7 Turnover
model for the Consumer Industry.
5

0 2023 16.9 1.7 Voluntary People and Pay

2019 2020 2021 2022 2023 2024 (P) 2022 15 3 Involuntary

Salary Increase % Attrition % ▪ Over the past few years, a digital pivot has forced consumer
organizations to look outside the core sector for diverse skills sets
and look towards early-stage e-commerce, logistics and
2023 versus 2022 technology firms.

Salary Salary
▪ With demand for agile structures, consumer sector is continuing to
Profit focus on business-driver based talent planning and skill-based
Industry Revenue Headcount Increase Increase Turnover
(PAT) deployment.
2023 (A) 2024 (P)

FMCG (Non-Durables) 9.3 9.6 20.1

⬌ ⬆
FMCD (Durables) ⬌ ⬆
⬆
Aon’s View
⬆ 10.1 10.0 16.6
▪ Consumer sector needs to constantly optimize their operating
model for cost reduction and inorganic growth will be used to
leapfrog ahead of competition.
▪ Packaged foods, personal care and consumer wellness categories
will continue to focus on premiumization agenda.
▪ Focus on Talent Fluidity - through cross-skilling and multi-skilling.
Fungible talent can be redeployed swiftly within the consumer
space.
33
Financial Services
Business Drivers
Industry Snapshot
Salary Increase
▪ Banking: Strong growth in FY23 with continuing momentum into
35
29.1 30.4 Merit FY24 driven by strong growth in the retail and MSME lending.
30 2024 (P) 4.2 6.0
25 23.5 Non- ▪ NBFC: Revival has been aggressive with AUM annual growth rate
20.2 2023 4.4 of 15% since Covid. Share of digital disbursements have also
20 16.5 6.2 Merit
15 soared with almost 30%.
10.9 10.6 10.2
8.6 8.5 ▪ Indian insurance industry, is buoyed by IRDAI’s focus towards
10 Turnover
5.3
5 ensuring “Insurance for all by 2047”. This paves way for many
2023 24.2
0
6.2 reforms & ease of business in the sector
Voluntary
2019 2020 2021 2022 2023 2024 (P)
Salary Increase % Attrition %
2022 22.5 6.6 Involuntary People and Pay
▪ Continuing war for talent and war for customers with emerging
2023 versus 2022 Fintech players, challenger banks and digital first set-ups.
Continued attraction of talent from Tech firms to sustain the wave
Salary Salary of digitization in the industry.
Profit
Industry Revenue Headcount Increase Increase Turnover
(PAT) ▪ Compensation continues to be driven largely by talent demand-
2023 (A) 2024 (P)
supply gaps, growth prospects of the sector.
Banking ⬆ ⬆ ⬆ 9.8 10.3 29.3 ▪ Mandates from regulators leading to firms revisiting pay-mix,
Investment Banking ⬆ ⬆ ⬌ 10.7 9.3 22.5 performance parameters & risk alignment at the leadership level.

Wealth Management 11.5 10.0 28.2

⬆⬆ ⬆ ⬆
Aon’s View
Asset Management ⬇ ⬆⬆ ⬆ 10.2 10.1 9.3
▪ The evolution of on people practices is mirroring the business
NBFC ⬌ ⬌ ⬆ 10.4 10.8 47.8 landscape change. With accelerated digitization, role architectures
- MFI ⬆ ⬆⬆ ⬌ 11.6 11.9 62.9 are pivoting from being functional centric to being skill centric.
- Housing Finance ⬆ ⬆ ⬆ 10.9 11.0 40.6
▪ Emergence of Hold Co structures in larger financial firms looking
Life Insurance ⬆⬆ ⬆ ⬆ 8.8 8.6 55.9 to build business cutting across the Financial Services spectrum.
▪ Renewed focus on assured LTI instruments like RSUs and use of a
General Insurance ⬆ ⬆ ⬆ 10.8 11.1 32.7 combination of instruments to retain talent and build wealth.
34
Fintech ⬆ ⬆ ⬆ 10.8 10.3 18.0
Global Capability Centers
Business Drivers
Industry Snapshot
Salary Increase ▪ Amidst global slowdown and macro-economic measures, organizations
25 Merit are focussing on cost optimization initiatives to drive synergies.
21.4
19.5 2024 (P) 9.3 0.9
20 17.1 17.0 ▪ Across various GCC sectors, there is a strong emphasis on digital
Non- transformation and platformization, investment in technology to enhance
14.2 2023 9.2 1.3
15 Merit their services and create end-to-end platforms for customers.
11.1 10.5 10.1
9.5 9.8
10 7.8 ▪ There is a push to take ownership of global processes and, at the same
Turnover time, strengthening their core operations to remain competitive and cost-
5
2023 effective.
14.0 3.0 Voluntary
0
2019 2020 2021 2022 2023 2024 (P) 2022 16.1 3.4 Involuntary People and Pay
Salary Increase % Attrition %
▪ Turnover has slowed down from last year. However, digital skills continue
to see higher Turnover compared to non-digital skills.
2023 versus 2022 ▪ Turnover rates for GCCs are significantly higher that Product Sector but
not as high as Services Sector which calls for the need for a differentiated
Salary Salary
Profit retention strategy for GCCs.
Industry Revenue Headcount Increase Increase Turnover
(PAT) ▪ Digital skills like IOT, Cloud architecture, automation and cyber security
2023 (A) 2024 (P)
are in high demand. Within non-digital skills, Risk, capital markets,
Retail and Supply assurance, digital ecommerce are also heating up.
⬆ ⬆ ⬆ 9.8 9.6 16.6
Chain GCC

Healthcare GCC ⬌ ⬌ ⬆ 9.2 8.9 17.6 Aon’s View

BFSI GCC ⬆ ⬆⬆ ⬆ 10.8 10.3 15.1 ▪ With cost pressures in 2023, GCCs are mostly investing in talent that
helps them build competitive advantage, hiring for the rest will be muted.
ER&D GCC ⬆ ⬆ ⬆ 10.7 10.7 15.3 ▪ Disproportionate investments are being made in new age solutions, with a
renewed focus on core.
Professional Services
⬆ ⬆⬆ ⬌ 11.5 10.6 22.6 ▪ While the market will be conducive, the journey will not be an easy one.
GCC
GCCs need to tackle potential hindrances like, lack of innovation, limited
business insight, leadership talent gap and short-term focus.
35
Life Sciences
Business Drivers
Industry Snapshot
Salary Increase
▪ Government initiatives to modernise regulatory frameworks and
25 Merit
improve approval processes are a shot in the arm for the sector.
2024 (P) 8.4 1.3
20 18.7 ▪ India's proficiency in creating vaccines and generic medications has
17.1
14.9 15.1 2023
Non- attracted interest from all around the world, and collaborations with
15 8.6 1.2
11.4
Merit significant global pharmaceutical corporations are expanding.
9.8 8.9 9.8 9.8 9.7
10 7.9 ▪ Expiring patents of blockbuster & some small-molecule drugs
Turnover worldwide between 2023-2026 presents a huge opportunity for
5
2023 13.1 2.0 Voluntary Indian generics.
0
Involuntary
2019 2020 2021 2022 2023 2024 (P)
2022 14.7 4.0 People and Pay
Salary Increase % Attrition %
▪ There is growing demand for scientists, researchers and
biotechnologists skilled in Drug Discovery and Development
2023 versus 2022 especially in areas like biologics and biosimilars.
Salary Salary ▪ Focus on AI, machine learning and big data is resulting in
Profit organizations competing for much in demand tech talent.
Industry Revenue Headcount Increase Increase Turnover
(PAT)
2023 (A) 2024 (P) ▪ Average Turnover rates remain high driven by unprecedented
CRO 10.1 10.6 -
demand for hot skills.
⬆ ⬆ ⬆

Pharma ⬆ ⬆ ⬆ 9.7 10.2 - Aon’s View

Med-Tech ⬆ ⬆ ⬆ 9.9 9.6 - ▪ Center's strong policy push in pharmaceutical, biotechnology and
medical devices is likely to boost sector growth.
▪ Sector likely to continue its growth trajectory fuelled by
technological advancements, increased focus on R&D and
deepening of capabilities across the value chain.
▪ As regards talent, the skills businesses need are changing as a
result of evolving digital advances and a growing emphasis on data. 36
Manufacturing
Business Drivers
Industry Snapshot
Salary Increase
▪ With the competitive advantage of a competent workforce and
20 cheaper labour costs supported by a growth in capex, India has
15.7
2024 (P) 9.0 0.6 Merit become a sought-after manufacturing hubs worldwide.
14.5 14.7
15 ▪ This is further strengthened by Production-Linked Incentive (PLI)
12.2
2023 Non-
9.4 9.6 9.7 9.8 9.6
8.9 0.9 Schemes & a strong public-private partnership (PPP) model
10 8.5 Merit
▪ National Policy on Advanced Manufacturing is leading adoption of
4.8 Turnover
5 Industry 4.0 tech, aiming to boost productivity and cut costs.
2023 12.9 2.7
0 Voluntary
People and Pay
2019 2020 2021 2022 2023 2024 (P) Involuntary
2022 12.8 2.9
Salary Increase % Attrition % ▪ An abundant engineering talent pool with increased focus on
design, engineering, testing & advanced technologies has
2023 versus 2022 positioned India as the preferred R&D hub for global players.

Salary Salary
▪ Manufacturing companies are also looking into expanding into Tier
Profit II Indian cities through GICs – becoming an innovation & growth
Industry Revenue Headcount Increase Increase Turnover
(PAT) enabler, improving operational and value chain efficiency
2023 (A) 2024 (P)
Aerospace and ▪ Digital and niche skills are rapidly shifting to core to the operating
⬆ ⬆ ⬆ 9.5 10.5 13.6 model of Manufacturing Organisations
Defense
Automotive ⬆ ⬆⬆ ⬆ 11.7 9.8 11.2
Aon’s View
Chemicals ⬌ ⬌ ⬌ 9.6 9.6 11.2
Engineering Design ▪ Automation & Tech-driven platforms will improve domestic
⬌ ⬆⬆ ⬆ 11.0 10.0 18.6
Services production & allow Indian manufacturing to be globally competitive.
Engineering/ ▪ An emphasis on backward integration and synergies to gain more
⬆ ⬆⬆ ⬆ 10.5 10.1 21.3
Manufacturing control over the price, quality, and quantity of raw materials.
Other - Manufacturing ⬆ ⬆ ⬆ 9.1 9.0 12.1 ▪ With increasing of digital and tech requirement, People costs, and
Turnover will stay high as supply fails to keep up with demand
Energy
⬇ ⬌ ⬆ 8.5 8.8 21.9 37
(Oil/Gas/Renewables)
Services
Business Drivers
Industry Snapshot
Salary Increase ▪ Healthy economic growth, changing demographic profile,
30 Merit increasing disposable income, urbanisation, and evolving consumer
25 22.8 23.4 2024 (P) 8.4 1.2 preferences have led to massive marketplace opportunities for
19.5 20.5
Non- segments like retail, e-commerce and media.
20 2023
15.6 8.2 1.4 Merit
15 ▪ Most organizations are applying omnichannel strategies and
9.9 10.8
10
9.2 9.6 9.6 expanding footprints through the seamless integration of Digital
Turnover and In store experiences to create impeccable customer journeys.
4.3
5
2023 18.2 2.3 Voluntary
0
2019 2020 2021 2022 2023 2024 (P)
2022 18.4 5.0
Involuntary People and Pay
Salary Increase % Attrition %
▪ Fluctuating cost of raw materials and manufacturing going to
influence some of the salary planning decisions in companies.
2023 versus 2022
▪ While 2021 and 2022 has been unparalleled when it comes to the
Salary Salary talent exchange across service sectors due to the large pent-up
Profit
Industry Revenue Headcount Increase Increase Turnover demand and economic volatility, Turnover is better managed for
(PAT)
2023 (A) 2024 (P) services sector this year.
E-Commerce ⬆ ⬆⬇ ⬆ 10.1 10.7 18.9
Aon’s View
Entertainment and
⬌ ⬆ ⬆ 9.4 8.8 20.5
Media
▪ With the services sector organization experiencing various
Professional Services ⬇ ⬇⬇ ⬌ 9.4 10.5 26.3 consumption channels, it is imperative to build agile teams and
digital structures to experiment with revenue models and improve
Telecomm Services ⬆ ⬆⬆ ⬆ 8.6 8.9 20.4 their customer value offer.

▪ Collaborative and streamlined sustainability and transparency

Retail ⬆ ⬆⬆ ⬆ 10.1 10.1 -
framework will be important to accelerate innovation.

38
Technology Consulting & Services
Business Drivers
Industry Snapshot
Salary Increase ▪ Amidst global slowdown and expected margin pressures for export heavy
30 27.3 Merit IT services industry, there is a return of high value ADM (Application
25 21.7 2024 (P) 7.6 1.9 Development & Maintenance) deals driving business in the near term
21.4
20 Non- ▪ With a strong demand for digital CX and AI Operations, third party service
17.1
14.2 2023 7.2 2.7 Merit firms are moving from transactional service providers to intelligent
15
9.8 10.9 9.9 9.5 operations and data driven services
9.5
10 7.8
Turnover ▪ Organizations are bullish in long term evident by the high M&A deal
5 activity with a focus on emerging technology such as AI, big data, & cloud
0 2023 15.0 6.7 Voluntary

2019 2020 2021 2022 2023 2024 (P)

2022 20.8 6.5
Involuntary People and Pay
Salary Increase % Attrition %
▪ Post the hiring spree in the past 2 years, Large IT service firms struggle to
maintain operational advantage over smaller firms, as utilization numbers
2023 versus 2022 for Tier 1 IT service firms are declining.
▪ Reacting to economic uncertainty, organizations are moving to a pyramid
Salary Salary
Profit heavily populated at the entry level, and also looking at tier 2 & tier 3 cities
Industry Revenue Headcount Increase Increase Turnover
(PAT) as low-cost alternatives.
2023 (A) 2024 (P)
▪ While there is a short-term surge in demand for core-stack ADM skills,
Application Services ⬆ ⬆ ⬌ 9.9 9.5 21.1 emerging tech skills continue to remain in focus for future capability

Third Party Services ⬌ ⬌ ⬌ 9.9 9.7 - Aon’s View

▪ With modest growth projections in 2023, hiring will remain muted as firms
will target to effectively utilize their existing talent pool better.
▪ Going forward, firms have three distinct dimensions to grow into:
• Growth: Disruptive growth in emerging technologies,
• Optimization: Focus on cost optimization with high density talent,
• Transformation: Revisiting the operating model while being agile to
tackle ambiguity.
39
Technology Platforms & Products
Business Drivers
Industry Snapshot
Salary Increase • Amidst global slowdown and macro economic downturn, global product
25 22 Merit firms have seen a plateaued/ slowing growth in various business segments
2024 (P) 8.1 1.8
20 17.3 18.1 17.9 • Cloud spending has slowed down, but most businesses have a positive
Non-
2023 outlook towards long term cloud spending. However, advertising has taken
15 12.7 7.8 2.2 Merit
11.2 11.6 a substantial hit due to reduced advertising spending and tightening of
9.6 10 9.8
10 7.8 data privacy laws
Turnover
5 • There is massive Cap-Ex investment happening towards building the AI
2023 12.6 5.3 Voluntary Infrastructure especially by semiconductor and cloud providers
0
Involuntary
2019 2020 2021 2022 2023 2024 (P) 2022 13.7 4.4 People and Pay
Salary Increase % Attrition %
• Turnover has slowed down compared to the great resignation era.
However, digital skills continue to see high Turnover.
2023 versus 2022 ▪ The massive demand for niche tech skills, especially in cloud and AI
Salary Salary continue and is expected to continue in the short to medium term
Profit
Industry Revenue Headcount Increase Increase Turnover ▪ Companies are making focused investment on towards high growth and
(PAT)
2023 (A) 2024 (P) high demand tech skills as compared to previous years where it was
aggressive across the board
Fintech ⬆ ⬆ ⬆ 10.8 10.3 18.0

Consumer Tech ⬆ ⬆ ⬆ 10.7 8.3 17.8 Aon’s View

Cloud Platform ⬆ ⬆⬆ ⬆ 10.2 10.0 18.2 ▪ With the immediate cost pressure, companies will remain to be
conservative in hiring for the short to medium term for vanilla skills
ICT ⬆ ⬆ ⬆ 9.8 9.5 16.6
▪ There is a pressing need to invest in upskilling and reskilling talent,
especially with generative AI taking shape and will have large scale
Enterprise Product ⬆⬆ ⬆⬆ ⬆ 10.1 10.0 19.9 implications on how jobs evolve

Semiconductors ⬆ ⬆⬆ ⬌ 10.4 10.6 14.9 ▪ We expect a shift to “Building” talent to win in an AI world compared to the
“Buy” approach 40
Core Research Team

Tarun Sharma Prateek Gupta Sanatvikram Singh Bisht

Associate Director Consulting Manager Manager

Talent Solutions Talent Solutions Talent Solutions

Komal Tiwari Saurav Kumar Singh Sreeram Srinivasan Soumya Bhayana

Consultant Consultant Consultant Associate Consultant

Talent Solutions Talent Solutions Talent Solutions Talent Solutions

Special Thanks To:

41
Aditya Verma | Ananya Singh | Guhan Krishnan | Manish Kumar | Prashrabdhi Kumar | Taru Saxena
Reach out to:

Nitin Sethi
Chief Executive Officer, India & South Asia
nitin.sethi@aon.com

https://humancapital.aon.com/

Aon

@Aon_India

#AonRewards
#AonSalaryTrends
#SalaryTrends
#AonSIS
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