Brace for disappointment! Indian IT sector employees likely to see flat salary hikes and deferred increments this year

Mar18,2024



Indian IT sector Employees should be prepared to flat Salary increment And the salary increase was postponed to 2024. India's information technology (IT) sector, valued at $250 billion, is projected to see stagnant salaries in 2024 due to the impact of global challenges on company operations. The sector, which is known to be a major employer in the country, is also expected to experience a slowdown in hiring activities.
IT companies may make offers, according to data obtained by ET from a leading hiring firm average salary assessment From 8.4% to 9% this year, similar to the 8.5-9.1% growth seen in 2023. Munira Loliwala, AVP – Strategy and Development at TeamLease Digital, noted that most companies are likely to postpone these salary hikes until the end. A deviation from the usual practice of increasing salaries in the first financial quarter, April.
The IT sector is currently focused on stabilizing employee numbers, with projections indicating either flat or negative growth in employee numbers for the year. While wage growth increased gradually from 8.8% in 2021 to 9.7% in 2022, it slowed to 8.5-9.1% in 2023.
Loliwala highlighted that many large multinational companies implemented an average increase of about 7% for most roles by the end of 2023. companies like Infosys, wipro, HCLTechAnd TCS took different approaches regarding salary increases, with some choosing to forego or selectively implement salary increases based on employee tenure.
For example, Infosys announced an average salary increase of less than 10% in December, which will be effective from November, with some employees receiving minimum single-digit increases.
Infosys chose not to give pay hikes to junior or mid-level employees, while HCLTech and Wipro kept out mid- or senior-level employees. Tata Consultancy Services (TCS) implemented pay hikes ranging from 6-8%, with exceptional performers receiving double-digit increments.
IT companies have been grappling with a sharp decline in revenue growth in recent quarters and a decline in headcount, with major players like TCS and Infosys avoiding campus recruitment last year.
The decline in global demand amid macroeconomic uncertainties and inflation in developed markets has led to an unprecedented slowdown in technology spending. As a result, IT companies are looking for ways to increase gross margins, with employee expenses representing the largest portion, comprising 50-60% of total expenses.
Loliwala pointed out that Global Competence Centers (GCCs) of multinational corporations are influencing the trend of low recruitment in the Indian IT sector. India in the GCC is expected to see an average salary increase of 10-10.1% this year, reflecting their impact on the industry.
Reports show that the GCC currently employs about 1.66 million individuals, the majority of whom are technical talents. Additionally, a large number of people in this field are joining certification and training programs to better themselves with the goal of better assessment and career growth.
The growth of technical talent in banking and financial services is identified as a major factor contributing to higher salary growth within the sector, with estimates indicating upward growth of approximately 11.1% this year.



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