There will be a big change in the salary and salary structure of employees in India. Companies are now planning to use Artificial Intelligence (AI) to decide salaries. In the next 2 to 3 years, AI-based predictor models will speed up salary decisions.

According to the EY ‘Future of Pay 2025’ report, 60% of companies are willing to use AI for salary and incentive decisions. Along with salary determination, companies also plan to use AI for real-time pay equity analysis and personalized benefits.

AI to Change Salary Structures Soon

In the coming years, companies will shift from fixed salary structures to AI-based forecasting and real-time salary revisions. AI will make salary decisions more personal and transparent. Blockchain and smart contracts will also ensure secure and automated salary payments.

AI-Based Salary System: A New Era

AI is reshaping traditional salary structures. Companies must adopt these technologies to retain employees and attract new talent. According to the EY report, AI will play a key role in salary and bonus decisions by 2028.

Expected Salary Hike in 2025

The report also reveals expected salary increments for 2025. On average, salaries in India are projected to increase by 9.4% this year.

Sector-Wise Salary Growth in 2025:

  1. E-commerce – 10.5% increase
  2. Financial Services – 10.3% increase
  3. Global Capability Centers – 10.2% increase
  4. IT Sector – 9.6% increase
  5. IT-Enabled Services – 9% increase

Employee Attrition Rate Drops

The report states that the employee attrition rate has fallen to 17.5% in 2024 from 18.3% in 2023. This is a positive sign, as companies’ strategies for stability and talent retention are working.

Companies Adopting New Work Models

To keep employees engaged, companies are now using AI, hybrid work models, and long-term incentives. In the future, AI will play a crucial role in shaping the Indian salary market. Along with high salaries, flexible working hours and hybrid models are becoming key factors in employee satisfaction.