Mumbai, Dec 18: Mercer, a business of Marsh McLennan and a global leader in helping clients realize their investment objectives, shape the future of work and enhance health and retirement outcomes for their people, today revealed the findings from their annual Total Remuneration Survey 2026, which reveals average employee salaries in India is set for median increase by 9% in 2026.

Despite facing a tougher economic outlook, the top factors influencing salary increases in 2026, which remain flat, include individual performance, position in salary range, inflation and the organization’s competitiveness in the job market. In addition to this, the survey which covers remuneration trends across more than 8,000 roles and in more than 1,500 companies, shows organizations in India are shifting toward broader, more holistic value-propositions, which is becoming central to how employers differentiate themselves in a competitive jobs market.

Malathi KS, Mercer’s Rewards Consulting Leader India, added, “Our survey shows most organizations in India will continue to plan pay increases in line with balancing cost pressures and talent retention. Alongside this, there is a growing emphasis on skills-based organization architecture, talent assessments to better align workforce capabilities with evolving business needs and pay programs to drive desired outcomes. As companies respond to shifting workforce dynamics—ranging from digital transformation and sourcing scarce, in-demand skills, to the rising importance of benefits and well-being, they are redesigning rewards strategies to build a more resilient and future-ready talent. These shifts present Indian organizations with significant opportunities to strengthen workforce engagement and shape a more agile and inclusive workplace.”

The survey also revealed that organizations are continuing to refine their rewards packages, with a focus on short-term incentives, moving toward more transparent, skills acquisition and deployment-based systems. These actions reflect a strategic effort to balance cost discipline with the need to attract and retain high-impact talent. Short‑term incentives like bonuses have led to a stronger emphasis on near-term performance alignment, cost efficiency, and building transparent, skills-based pay frameworks to support evolving workforce needs in the face of AI and productivity priorities. Adding to this, implementation of newly approved labor codes will tighten the social security net as well as preventive health care, at large.

As High Tech (product and consulting) and the Automotive Industry are set to have the highest salary increases in 2026 at 9.3% and 9.5% respectively, with SSO/GCC, Life Sciences and Consumer and Retail remaining flat – the IT, ITES, and Global Capability Centers (GCC) sector in India continues to lead the way in offering innovative and progressive employee benefits reflecting the sector’s commitment to enhancing employee well-being and engagement.

“As India embraces digital transformation, navigates shifting workforce expectations and sharpens its focus on productivity, revisiting the number of employees eligible to receive an increment, is a strategy being adopted by some companies to manage cost. This is a time for leaders to review their priorities and build stronger cultures embedded in high performance ethos, making empowerment and accountability going hand in hand, and fostering a fit for purpose value proposition”, Mercer’s Career Business Leader, India, Mansee Singhal concluded.