More Companies To Use AI To Better Job Reward Systems: EY Report

Mumbai: Six out of 10 employers in India are looking to explore the potential of artificial intelligence (AI) to improve employee reward systems in the coming three years, a new report said on Thursday.

This comes as businesses face a rapidly evolving job market, driven by technological advancements and shifting employee expectations.

According to the report by EY India, the biggest change is the growing role of AI in shaping employee compensation.

Employers are increasingly turning to AI to streamline processes like salary benchmarking, real-time pay equity analysis, and creating customisable employee benefits. The shift is expected to move from traditional pay models to AI-driven analytics by 2028, the report added.

Through AI-powered platforms, companies are now able to offer more personalised benefits and ensure pay equity across different employee groups.

“While salary increments remain steady, organisations must go beyond traditional pay structures to attract and retain top talent in the near future,” Abhishek Sen, Partner and Leader, Total Rewards, HR Technology and Learning, People Consulting, EY India said. In addition, the report said blockchain technology is emerging as a tool to help companies with secure, transparent, and automated payroll systems, particularly for cross-border compensation. India’s workforce can expect an average salary increase of 9.4 per cent in 2025.

At the same time, employee attrition, or the rate at which employees leave companies, has seen a slight improvement, decreasing from 18.3 per cent in 2023 to 17.5 per cent in 2024.