Mercer Predicts 9% Salary Hike in 2026: AI & New Labour Codes to Reshape Pay

• Mercer report forecasts an average 9% salary increase in India for 2026, with employers retaining an advantage.
• Product & Consulting (9.3%) and Manufacturing, Engineering & Automotive (9.5%) sectors to see highest increments.
• New Labour Codes may reduce take-home pay for employees and increase costs for companies due to social security and medical check-ups.
• AI adoption will drive skill-based pay, valuing specialized digital skills (cybersecurity, AI integration) and blue-collar tech roles.
• Companies will focus on short-term incentives, skill acquisition, and talent retention, while being cautious about new hires.

Why It Matters: India's 2026 salary hikes average 9%, influenced by AI-driven skills and new labour code impacts.