Salary Growth Moderates in India, GCCs Lead the Pack in 2026
India’s corporate salary landscape is set to moderate in 2026, with overall increments projected at 9.1%, slightly down from 9.3% in 2025, according to the EY Future of Pay report. Global Capability Centers (GCCs) are expected to lead growth with projected increments of 10.4%, driven by sustained global demand and investment in specialised digital skills. Financial services, e-commerce, and life sciences & pharmaceuticals follow closely with 10%, 9.9%, and 9.7% projected increases, highlighting sectors where talent remains in high demand.
Moderation In Traditional Industries, Targeted Pay Strategies On The Rise
Engineering, manufacturing, automotive, and infrastructure sectors continue to moderate, reflecting cautious capex cycles, utilisation pressures, and tighter margin discipline. Organisations are moving away from “one-rate” salary adjustments, instead deploying targeted pay corrections, skill premiums, and performance-led rewards. AI and digital roles are driving differentiation, with outstanding performers receiving 1.5 to 1.6 times the increment of average performers. Variable pay is also rising as a proportion of total compensation, reaching 16.1% in 2025 from 14.8% in 2024. CXOs saw an average 27.5% variable pay, while individual contributors averaged 11%.
Performance, ESG, And Analytics Shape Rewards Management
The report notes that payout dispersion widened in 2025, with top performers earning 120%–150% of their target, compared to 60%–80% for average performers, sharpening pay-for-performance outcomes. Additionally, 35% of large organisations are incorporating ESG-linked KPIs in leadership variable pay. Companies face challenges in attracting and retaining talent amid AI-driven workforce redesigns. To address this, firms are leveraging pulse surveys and analytics to guide targeted reward investments, ensuring a strong link between performance, impact, and pay outcomes.
The EY report signals that 2026 will continue to reward high performers and digital skillsets, with a deliberate shift toward differentiated, at-risk pay driving competitive advantage in India’s evolving salary landscape.
(This article has been syndicated from ANI)
Aishwarya is a journalism graduate with over three years of experience thriving in the buzzing corporate media world. She’s got a knack for decoding business news, tracking the twists and turns of the stock market, covering the masala of the entertainment world, and sometimes her stories come with just the right sprinkle of political commentary. She has worked with several organizations, interned at ZEE and gained professional skills at TV9 and News24, And now is learning and writing at NewsX, she’s no stranger to the newsroom hustle. Her storytelling style is fast-paced, creative, and perfectly tailored to connect with both the platform and its audience. Moto: Approaching every story from the reader’s point of view, backing up her insights with solid facts.
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