AI Skills Drive Salary Premiums and Hikes in India

According to EY India's "Future of Pay 2025-26" report, reported by Economic Times and Financial Express, Corporate India is projected to give an average salary increase of 9.1% in 2026. The report projects Global Capability Centres (GCCs) to lead with expected increments of 10.4%, while financial services and e-commerce are forecast at 10.0% and 9.9% respectively (Economic Times; Financial Express). The EY report states that roles in generative AI, machine learning and advanced analytics attract base-pay premiums of 30-40% or more, particularly in technology firms and GCCs (Financial Express; Economic Times). The report also records a decline in overall attrition to 16.4% in 2025 from 17.5% in 2024, with voluntary exits remaining dominant (Economic Times). Abhishek Sen, Partner and Leader, Total Rewards, HR Technology and Learning at EY India, is quoted in Economic Times saying, "The future of pay is no longer just about the size of annual increments but about identifying the right skills to reward and balancing competitiveness with long-term sustainability."

The reported 30-40% premiums for AI, ML and advanced analytics reflect market-level wage adjustments for scarce technical skills rather than a single employer decision. Industry-pattern observations: market mechanisms that tie pay to discrete capabilities tend to produce steeper premiums when supply is limited and demand grows rapidly. For practitioners, that pattern typically increases competition for talent with deep ML engineering, model-deployment, MLOps and data-engineering skills, and it raises the commercial return on focused reskilling programs.

The EY report frames a broader shift from role-based to skills-based compensation, with nearly half of surveyed organisations moving toward skill-linked pay structures (Economic Times). Reporting also highlights a rise in variable pay as a share of compensation, with average variable pay at 16.1% of fixed salary in 2025 and leadership-variable components higher (Financial Express). Together, these signals suggest pay design is increasingly calibrated to measurable contributions and scarce capabilities rather than tenure alone. For data teams and hiring managers, this means hiring and retention conversations will more often invoke specific capability premiums and shorter review cycles for high-demand skills.

• •Watch how employers operationalise skills-based frameworks: indicators include more frequent market-price reviews, role-to-skill mapping in HR systems, and tiered premiums for advanced versus foundational skills. Industry context: organisations that have moved to skills-based pay tend to increase review cadence for emerging digital capabilities.
• •Monitor attrition trends by sector: the report notes 14.1% attrition at GCCs versus 24% in financial services (Economic Times), a differential that may affect where companies source AI talent.
• •Track compensation banding for adjacent capabilities such as cloud, cybersecurity and hybrid business-technology roles; the report flags double-digit premiums for hybrid skills (Financial Express).

For practitioners: rising premiums put a valuation on time invested in advanced ML and generative-AI competencies. Teams evaluating hiring, upskilling or internal mobility programs should treat reported premiums as market signals that influence candidate salary expectations and internal equity conversations. Industry observers should also watch how organisations reconcile increased variable pay and ESG-linked incentives with skill-premium frameworks.

All high-stakes numbers, sector projections and direct quotes in this summary are taken from EY India's "Future of Pay 2025-26" report as reported by Economic Times and Financial Express.