The average salary increments across companies in India is expected to decrease to +9.1% this year, down from +9.4% last year, as inflation, higher interest rates, and a slowing economy are forcing companies to practice more caution, according to a study conducted by audit and consulting firm Deloitte India.

Deloitte collected information from close to 300 organisations across seven sectors and 25 sub-sectors in the debut edition of their Talent Outlook 2023 survey.

In addition to lower pay this year, the study also found that 2023 increments are expected to be lower across almost all sectors compared to 2022. The IT sector will see a major drop, while the life sciences industry will witness the highest increments, according to Deloitte India.

The survey also noted that attrition reached 19.7% in 2022 which is slightly up from 19.4% in 2021. Deloitte India Partner Anandorup Ghose said they are expecting to witness lower trends in increments and attrition this year.

“The significant attrition levels across industries in late 2021 continued until early 2022. We saw Indian organisations budgeting the highest increment in 2022 over the last four years. What they also did was hire aggressively. This led to employee costs rising faster than revenue growth over the last three to four years in almost every other company,” said Anandorup Ghose, Deloitte India partner.