The challenging economic landscape has compelled IT firms to adopt a more discerning stance when it comes to rewarding employees.For many IT professionals, excluding a select club of top performers, salary increases have moderated in the range of 5% to 9% in financial year 2023-24.
Infosys, known for having the highest average annual increments among competitors, saw average hikes drop to 9% in FY24, compared to 14.6% in FY22. The average hike for FY23 was 9.9%.
Similarly, TCS implemented an average hike of 7-9% in FY24, down from 10.5% in FY22. In a recent interaction with TOI, TCS HR head Milind Lakkad said, “We are one of the few companies to give a hike in April this year. We will continue to do that.” Wipro employees saw a 9.4% increase in the median remuneration compared to the previous year.
Tech Mahindra and HCLTech have maintained average hikes between 5% and 7%. HCL’s annual reports showed that the company rolled out an average hike of 6.8% in FY22, which dropped to 5% last year. Tech Mahindra’s average increment was 5.6% in FY24, compared to 6% in the previous year and 5.2% during the pandemic-hit year when other firms provided double-digit hikes.
Pranshu Upadhyay, regional director and head of India technology practice at recruitment consultancy Michael Page, attributed this trend to two factors: reducing margins as workforce and overall business costs continue to rise, and the availability of talent at the entry level in India, where most of the workforce in these organisations possesses generic tech skills. “These companies still want to maintain a good cost arbitrage and wage is one of their biggest costs. Even marginal cuts in the same lead to a bigger absolute impact,” Upadhyay added.
Mansee Singh, careers leader at Mercer India, said that as salaries moderate, companies are using differential hikes to retain critical talent.
Tech professionals with niche skills, particularly in the deep tech domain, have been able to secure higher upticks in the range of 12-15%, Milind Shah, MD of Randstad Digital in India, said. “As companies across sectors continue to focus on digital transformation initiatives, these professionals are becoming more relevant, and organisations are seeing the value in investing in them. In the next fiscal year, we expect more green shoots in compensation as talent requirements in specialisations like AI, ML, cybersecurity, cloud computing, and data analytics will continue to grow,” he said.
Infosys and Tech Mahindra did not respond to TOI’s queries as the firms are in a ‘silent period’ ahead of June quarter earnings.
