2025 Salary Trends: Smaller Increases, New Expectations—Are You Ready?
As the new fiscal year approaches, employees’ concerns are starting to surface once again—whether it’s about expected salary hikes or the rising cost of school fees. It’s that time of year when everyone starts asking: Will there be a salary hike this time? If so, how much? And with school fees increasing, how will families manage? Are you also wondering about these questions, or is it just a normal part of the yearly cycle?
While these worries tend to arise every year, there’s something different about this one. In recent years, the IT sector has seen generous double-digit salary hikes, but this year, I believe things appear to be shifting. Many companies are signaling that salary hikes will be more modest, with a move toward single-digit increases.
What’s Happening in IT Companies?
One of India’s largest IT firms is set to issue its annual salary hike letters for the fiscal year 2025 in March, with expected increments ranging from 4% to 8%. These payouts are likely to be released in April 2025. Another major IT company has already announced it will issue salary increment letters by the end of February.
During the pandemic, IT companies offered double-digit salary hikes, but now, the trend is shifting toward smaller, single-digit increases. For example, in FY24, employees received hikes averaging 7-9%, while the year before saw hikes of around 10.5%.
What’s New This Year?
This year, some companies are tying salary hikes and variable payouts to employees’ adherence to return-to-office (RTO) policies. As per my understanding employees who follow the RTO guidelines may see higher salary increments. Additionally, the new salary hikes will be issued alongside quarterly variable pay (QVP) for the October-December period.
Junior and mid-level employees may have already received their full variable pay, while senior employees have received 20-40% of their expected payouts.
Are There Still Expectations for Big Hikes?
Are you hoping for a large salary hike this year, or do you feel that it’s better to adjust expectations to the current circumstances? Whatever your outlook, it’s clear that companies are adjusting to a new normal, and salary hikes will reflect those changes.
Share Your Thoughts!
Are you hoping for a large salary hike this year, or adjusting expectations to the current circumstances? It’s clear companies are adjusting to a new normal, and salary hikes will reflect that.
Or are you thinking of switching to your own business?
I’d love to hear your thoughts! Share your experiences and let’s discuss what the future holds!