Synopsis
A recent report indicates that 60% of Indian employers are planning to adopt artificial intelligence to improve employee reward systems over the next three years. This shift is largely driven by technological advancements and changing employee expectations.Key Takeaways
- 60% of employers in India will use AI for rewards.
- AI will help with salary benchmarking and pay equity.
- Blockchain technology is aiding payroll systems.
- Average salary increase expected: 9.4% in 2025.
- E-commerce leads with 10.5% salary growth.
Mumbai, Feb 27 (NationPress) Six out of ten employers in India are eager to investigate the possibilities of artificial intelligence (AI) to enhance employee reward systems within the next three years, according to a recent report released on Thursday.
This initiative arises as companies navigate a rapidly changing job landscape influenced by technological progress and evolving employee expectations. As per the report by EY India, the most significant transformation is the increasing impact of AI on employee compensation.
Employers are progressively utilizing AI to optimize processes such as salary benchmarking, real-time pay equity assessments, and tailoring employee benefits. The transition from conventional payment structures to AI-enhanced analytics is anticipated by 2028, as stated in the report.
Utilizing AI-driven platforms, organizations can now provide more individualized benefits and guarantee pay equity among various employee demographics.
“While salary hikes remain stable, organizations need to transcend traditional pay frameworks to attract and retain elite talent in the foreseeable future,” remarked Abhishek Sen, Partner and Leader, Total Rewards, HR Technology and Learning, People Consulting, EY India.
Moreover, the report indicated that blockchain technology is emerging as a mechanism to assist companies in achieving secure, transparent, and automated payroll systems, especially for international compensation. The workforce in India can anticipate an average salary increment of 9.4 percent by 2025.
Concurrently, employee attrition, defined as the rate of employee turnover, has shown slight improvement, decreasing from 18.3 percent in 2023 to 17.5 percent in 2024.
Regarding sector-specific salary trends, the report emphasized that industries such as e-commerce, financial services, and Global Capability Centres (GCCs) are witnessing the highest salary growth rates.
E-commerce is projected to lead with a 10.5 percent salary increase in 2025, driven by the surge in digital commerce and rising consumer expenditure.
The financial services sector is also expected to receive a salary enhancement of 10.3 percent, while GCCs are anticipated to experience a 10.2 percent salary rise.
In addition to competitive compensation, employees now prioritize flexibility.
The report reveals that 90 percent of employees are working in hybrid arrangements, blending both in-office and remote work. Half of the surveyed employers also noted a growing interest in gig and temporary positions.
Companies that provide flexible working hours and remote work opportunities are more likely to draw and retain talent, as highlighted in the report.
