The Indian IT sector is experiencing a cautious approach to salary hikes, even as attrition rates increase. Industry leaders, including TCS, Infosys, Wipro, and HCLTech, have reported higher turnover in Q3 FY25, yet salary increments remain within the 3% to 8% range, aligning with economic conditions and company performance.
Experts note that this is not a demand-driven hiring surge, but rather a sector-wide adjustment to global uncertainties. The IT attrition rate is expected to hover around 12-13% for the year, but salary increases remain subdued, focusing on high performers and retention efforts.
Salary Hike Trends Across IT Giants
- TCS – Maintaining its traditional appraisal cycle, TCS has granted an average salary hike of 7-8%, with top performers receiving double-digit increments.
- Infosys – Salary hikes are occurring in two phases, with junior employees receiving appraisals in January and others expected to get them in April. The average hike is projected at 6-8%.
- Wipro & HCLTech – Both companies have reported higher attrition rates, yet pay increases remain selective, focusing on variable pay adjustments rather than fixed raises.
Experts note that some companies have delayed their salary hike cycles from April-June to Q3 (September-October) to manage costs more effectively.
Hiring Slowdown and Market Uncertainty
According to Xpheno, the active job openings in the IT sector remain below 122,000, indicating a hiring slowdown. While the sector briefly saw a recovery in Q3 FY24, hiring demand has moderated again, reflecting ongoing economic uncertainty.
- TCS reported attrition of 13%, despite a 5,000 headcount reduction in Q3 FY25.
- Infosys attrition rose to 13.7%, up from 12.9% in the previous quarter.
- Wipro’s attrition increased to 15.3%, while HCLTech’s rose to 13.2%.
Variable Pay Reductions and Industry-Wide Adjustments
Industry experts highlight that variable pay structures have been impacted by slowing demand. Many senior executives at TCS saw a 20-30% cut in variable pay, directly linked to business unit performance.
- Junior employees at TCS received full payouts, while others had reductions based on attendance and performance.
- Companies are focusing on cost control, with limited retention-driven salary hikes.
Conclusion
As the Indian IT sector navigates economic pressures and hiring challenges, salary hikes remain controlled, focusing on top performers rather than across-the-board raises. With no major hiring wars, IT firms are prioritizing stability over aggressive pay increases, signaling a conservative approach in FY25.
