India Inc employee attrition rises to 18% in 2026; AI is changing how companies manage talent, shows new study

Employee attrition across industries in India has risen this year as companies reshape their workforces amid increasing artificial intelligence adoption and growing demand for specialised AI skills.

Overall attrition increased to 18% in 2026, compared with 16.2% in 2025 and 17.1% in 2024, according to AON Plc's latest Annual Salary Increase and Turnover Survey for India 2026-27.

The global professional services firm noted that the survey is based on analysis of more than1,200 organisations across 45 industries.

Attrition refers to the rate at which workers leave an organisation over a given period, whether through voluntary resignations or involuntary exits such as layoffs. A higher attrition rate means a larger share of the workforce has left during the period and their positions remained unfilled.

As AI becomes deeply embedded in day-to-day work, companies in India are reshaping their workforce strategies to adapt to changing skill requirements. Established adoption of AI productivity tools rose to 56% in 2026, from 46.1% in 2025, with usage increasing across every job cluster covered by the survey.

Employers are also increasingly focusing on preparing their existing workforce for these changes, with around 60% prioritising employee upskilling.

Investment in agentic AI and demand for AI-related skills are also growing, while talent premiums for the technology, machine learning and data science roles increased by nearly 10% from 2025, reflecting demand for specialised skills.

“The rapid adoption of AI signals a shift from experimentation to enterprise-wide application. The next priority is translating that momentum into measurable productivity and growth. Employers that establish credible baselines, identify the capabilities that create differentiated value and align workforce investment accordingly will be best placed to realise AI’s full potential,” said Roopank Chaudhary, Partner & Rewards Consulting Leader, Talent Solutions, India, Aon.

The survey projects salaries in India to rise by 9.1% in the upcoming year, marginally higher than the actual increase of 9% recorded in 2026.

This reflects continued resilience in compensation budgets despite geopolitical uncertainty and global trade risks, according to the company.

Salary increase projections vary by industry. Non-banking financial companies (NBFCs) are projected to lead salary growth in 2027 at 10.1%, followed by energy at 9.9% and real estate and infrastructure at 9.8%.

Source: AON

“Strong domestic consumption, sustained investment and export growth continue to support business confidence, allowing employers to invest in talent while maintaining cost discipline,” Chaudhary said.

“Stable salary budgets are enabling a more targeted approach to pay. A modest rise in non-merit adjustments, particularly in manufacturing and technology, reflects greater focus on market alignment, scarce skills and critical talent. Employers are increasingly focused not only on how much they spend, but where that investment can deliver the greatest workforce and business value," he added.

Eshita Gain is a digital journalist at Mint, where she joined in May 2025. She writes on corporate developments, personal finance, markets, and business trends, with a focus on delivering timely and relevant stories to a broad audience. <br><br> While her core beat lies in business and finance, she is not confined to a single niche and frequently explores stories across domains, including international relations and policy developments. <br><br> She holds a postgraduate diploma in business and financial journalism by Bloomberg from the Asian College of Journalism (ACJ), Chennai. During her time there, she received rigorous training in tracking financial data, interpreting corporate filings, and reporting on business developments. She has pursued her graduation from St. Joseph’s University, Bengaluru in a multi-disciplinary course. Her majors included Journalism, International Relations, peace and conflict studies. <br><br> Eshita has previously worked in digital marketing, which enables her to write SEO friendly copies that are clear and engaging. <br><br> Her primary interest lies in breaking down complex subjects and writing clear, accessible copies that inform readers. She aims to bridge the gap between technical financial language and everyday understanding. Outside the newsroom, Eshita enjoys reading non-fiction, and exploring new places, constantly seeking fresh perspectives and stories beyond headlines.

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