After two years of double-digit salary increases, Indian IT companies are now offering single-digit hikes. For the financial year 2023-24, major firms like Infosys, TCS, and Wipro report modest raises as clients cut discretionary spending and caution increases amidst economic challenges. While top performers still receive substantial hikes, most employees see a moderation in salary increments.
A Shift in Salary Increments
Infosys, known for its higher average annual increments, saw average hikes fall to 9% in FY24, down from 14.6% in FY22, with FY23 noting 9.9%. TCS reflected a similar trend, granting average hikes of 7-9% in FY24, compared to 10.5% in FY22. Wipro employees experienced a median remuneration hike of 9.4% compared to the previous year.
Milind Lakkad, TCS HR head, stated, “We are one of the few companies to give a hike in April this year. We will continue to do that,” during a recent interaction with TOI.
HCLTech and Tech Mahindra’s Approach
Tech Mahindra and HCLTech have maintained average hikes between 5% and 7%. HCLTech reported an average hike of 6.8% in FY22, which dropped to 5% last year. Tech Mahindra’s average increment stood at 5.6% in FY24, down from 6% in the previous year and 5.2% during the pandemic year when other firms provided double-digit raises.
Pranshu Upadhyay, regional director and head of India technology practice at recruitment consultancy Michael Page, explained the trend: “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.”
Retaining Critical Talent
Mansee Singh, careers leader at Mercer India, mentioned that companies are opting for differential hikes to retain critical talent as overall salary increments slow down.
Tech professionals with specialized skills, especially in deep tech, continue to secure higher salary increases. Milind Shah, MD of Randstad Digital in India, stated that professionals in AI, ML, cybersecurity, cloud computing, and data analytics are seeing upticks in the range of 12-15%. “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.
Economic Uncertainties and Strategic Investments
This overall trend reflects a cautious approach by Indian IT firms amid economic uncertainties, balancing the need to retain key talent while managing increasing business costs. The shift from double-digit raises to more modest increments aligns with a broader focus on cost management and strategic investment in specialized skills crucial to digital transformation.
Infosys and Tech Mahindra did not respond to TOI’s queries as both companies are presently in a ‘silent period’ ahead of their June quarter earnings announcements.
