Summary: According to EY’s Future of Pay 2025 report, 6 in 10 Indian employers are looking to adopt AI-driven compensation strategies over the next three years. By 2028, companies are expected to move away from manual pay benchmarking and fixed incentives, embracing AI-powered predictive analytics and real-time salary adjustments instead.
AI tools will help personalize benefits, optimize rewards, and ensure pay equity across diverse workforce segments. Additionally, blockchain and smart contracts are set to enhance secure, transparent, and automated payroll processing, particularly for cross-border payments.
This tech-driven shift aims to create more agile, fair, and employee-centric compensation models, helping companies stay competitive in the evolving talent landscape.
Artificial Intelligence (AI) is set to play a transformative role in shaping employee compensation and rewards strategies in India over the next three years, according to EY’s recently released Future of Pay 2025 report.
The report highlights that six out of ten Indian employers are keen to explore AI-driven solutions to enhance how they design, manage, and deliver employee compensation. This shift marks a significant move away from traditional, manual pay benchmarking and rigid incentive structures. By 2028, organizations are expected to adopt predictive analytics and real-time salary adjustments, powered by AI, to better align pay practices with evolving business needs and employee expectations.
AI-powered compensation platforms are also set to personalize employee benefits and optimize reward frameworks, enabling companies to tailor compensation packages to the unique needs of a diverse workforce. Additionally, these platforms can ensure pay equity by identifying and addressing potential gaps across gender, experience levels, and geographies.
The report also underscores the growing role of blockchain technology and smart contracts in the compensation landscape. These technologies are emerging as key enablers of secure, transparent, and automated payroll processing, particularly for organizations managing cross-border compensation for globally distributed teams.
As Indian companies navigate an increasingly digital and employee-centric future, leveraging AI and blockchain in compensation strategies is expected to foster greater transparency, agility, and fairness, ensuring organizations remain competitive in the talent market.
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