Accenture is not paying hikes to its employees in India and Sri Lanka in 2023 except where it is legally mandated or where it has committed to it in critical skill areas, country managing director Ajay Vij said.
The broader picture
This comes at a time when the sector is facing numerous headwinds, and as per Accenture’s commentary at the end of September.
Now there is certainly no improvement in the discretionary spend environment or the macro. In March 2023, Accenture announced it was laying off 19,000 employees.
Vij said the company experienced a macro environment that was more challenging than anticipated at the beginning of the FY23 fiscal year, and growth was lower than planned.
The firm reported mixed numbers last quarter, and its guidance for FY24 was the second-lowest in the past 16 years.
Only if “legally mandated or committed”
Vij said, “Our rewards philosophy is to provide market relevant pay based on skills and location that is affordable for Accenture. Keeping our payroll aligned with market is essential to the health of our business, including competitive pricing of our services”.
“Given the context of our performance, we will not be providing any stay-at-level (base pay) increases this year except where legally mandated or committed in a few critical skill areas.”
Individual performance bonuses ‘significantly lower’
He also stated that while it will payout individual performance bonuses based on the individual’s contributions wherever it is applicable, it will be ‘significantly lower than last year’.
“…our global annual bonus funding is based on our company performance. Given our performance, you should expect our global annual bonuses to be significantly lower than last year,” he said.
Promotions
The company is also significantly reducing its promotions.
Accenture has 13 levels, with 13 being the lowest and 1 being the highest.
Up to the level of Associate Director (Level 5), it will reward promotions in December as scheduled, but it will be lower than last year.
For levels 1 through 4, promotions have been postponed till June 2024.
“We are postponing our promotions to and within MD, and appointments to SMD, until June 2024 in order to allow ourselves to return to growth so that promotions are affordable,” Vij’s email said.
“Rewards philosophy”
“Our rewards philosophy is to provide market relevant pay based on the skills and locations where we operate. We also consider a variety of factors, including the macroeconomic environment in making our decisions around pay and benefits,” a spokesperson said.
These decisions are indicative of the larger climate in the sector.
Indian firms are moving the same way.
Indian companies
Last quarter, HCLTech said it was skipping the salary hikes of senior management level staff, and deferred the payhikes of junior employees by a quarter.
Wipro has pushed its salary hikes from September to December 2023.
Infosys is yet to roll out the salary hikes initially slated for April and July.
