How AI is changing pay, career growth and the employee deal in India

A degree, few years of experience and steady progress through job titles have long defined how professionals judge their careers. Employers, meanwhile, have used experience and performance to determine who gets promoted and how much they earn. AI is putting pressure on parts of that arrangement as companies place greater value on what employees can do with new tools and how effectively they apply those capabilities.

A recent What Talent Wants 2026 report found that 71% of surveyed technology, product and data professionals considered hands-on AI training important, but only 29% said their current employers provided it. Career progression heavily weighed in their decisions: 87% said clear information about career growth was very important when evaluating an organisation. Nearly 59% were actively looking for their next role.

These findings point to a wide gap between what employees expect from employers and what they receive. Access to training matters, but so does knowing whether new skills will lead to more responsibility, a different role or better pay. Asking employees to keep adapting without making those outcomes visible can weaken the case for staying.

Skills are beginning to influence pay

Compensation is another part of the employment deal being reconsidered. EY India's Future of Pay 2026 report projected an average salary increase of 9.1% for Indian companies in 2026. It also found that AI, machine learning, cybersecurity and cloud capabilities could command skill premiums of 30–40%. Nearly half of the organisations surveyed were moving towards skills-based pay frameworks.

A skill premium does not mean every employee who completes an AI course will receive a higher salary. Employers must determine whether the capability is relevant to the role and whether it improves performance or creates value for the business. Employees, in turn, need a clearer understanding of how acquiring and applying a skill affects their prospects. This calls for more transparent criteria around pay reviews, promotions and internal mobility. If two employees have similar tenure but different responsibilities and capabilities, organisations need a credible way to explain how those differences are reflected in compensation.

The employment deal also depends on whether people can see a future within the organisation. As AI changes tasks and job descriptions, companies will need to make career pathways more flexible, allowing employees to move across functions or take on new responsibilities as their skills develop. That means managers must connect training to actual vacancies, project opportunities and changing business needs. It also means making room for employees to learn while working, rather than treating development as something to pursue outside their regular responsibilities.

Such ideas will be part of the wider discussion at The Economic Times' Future of Knowledge Work Summit 2026 in Mumbai on 25 November 2026, where leaders will examine how AI is changing work and the expectations between employers and employees.

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