Mercer Survey: Projected Growth in Indonesian Employee Salaries Slows to 5.8 Percent in 2026

JAKARTA - Global human resources consultant Mercer projects an average salary increase for employees in Indonesia of 5.8 percent by 2026.

This figure is lower than the estimated salary increase in 2025 which reached 6.3 percent, in line with the slowdown in business expansion and cost pressures that are still faced by the business world.

The projection is contained in the Mercer 2025 Total Remuneration Survey which analyzes remuneration trends and policies for more than 7,000 positions in 588 companies in Indonesia.

Even though the rate of salary increases has slowed down, all companies surveyed or 100 percent of respondents still plan to increase employee salaries in 2026, the same as in 2025.

Mercer noted that the main factors affecting salary adjustments in 2026 include individual performance, salary range, and company performance.

Based on the industrial sector, chemicals are the sector with the highest projected salary increase, namely around 6.2 percent, reflecting optimism and investment commitment to talent development.

Meanwhile, the automotive industry is expected to record the most moderate increase of 4.9 percent, lower than other sectors.

In terms of bonuses, the realization of bonus payments in 2025 is expected to be below expectations, with an average of 16.6 percent of annual basic salary, down from the 17.5 percent projection in 2024.

The rate of voluntary turnover (voluntary turnover) is relatively stable at around 5.2 percent in 2025, in line with the achievements of 2023 and 2024.

However, Mercer noted an increase in involuntary resignations, particularly in the high-tech sector, mining, and mining contractors.

In addition, plans to expand the workforce have also slowed, with only about 20 percent of companies planning to add employees by 2026, down from 25 percent in the previous projection.

Associate Director & Career Products Leader Mercer Indonesia Yosef Budiman said that the difference in salary budgets between industries requires companies to implement more specific and targeted compensation strategies.

"The slowdown in recruitment plans requires companies to manage reward and retention strategies more focused in the midst of a talent market that remains competitive," he said.

President Director of Mercer Indonesia Isdar Marwan assessed that this finding reflects the need for more strategic management of growth ambitions amid economic uncertainty and increasing cost pressures.

"HR and business leaders need to prioritize productivity through skills development and retraining, strengthening digital capabilities, and investing in employee health as a long-term differentiator," said Isdar.

This strategy is in line with global talent trends and is key for companies in Indonesia to remain adaptive and competitive in the long term.