Attention IT Employees: Expect Big Salary Increments This Year (Find Out Why?)
IT professionals and their crazy salary hikes upon switching the companies has been creating a lot of buzz lately.
However, just like all good things must come to an end, so is the salary increment. Moving forward, the IT companies are most likely to reduce the record salary increments given out over the last two years in the next fiscal.
Global Slowdown & Stabilized Attrition
As per the IT analysts, this can be attributed to the global slowdown which has forced companies to ponder upon balancing the hiring against rising expenses.
This does not mean that the vital and critical roles will not be in demand, but it means that we will have kiss the big 70-80 per cent renumeration hikes that were doled over the last few months, goodbye!
The hikes will return to the levels they were before the pre-Covid levels and most likely will remain in the range of 9-10%.
Sunil C, chief executive of TeamLease Digital said that as compared to the frenzied wage increases seen a couple of quarters back, there has been a visible normalization in the salary hikes in the first quarter of the ongoing financial year.
He added that decreased funding in the startup ecosystem has led to layoffs, this has bolstered the talent supply for the traditional IT companies.
There is currently a widespread fear of recession across key geographies like the US and Europe and that is one of the reasons why companies shifting focus on controlling high wage bills, reducing retention costs, improving utilization and eventually the reason behind the decrease in salary hikes.
Due to the talent war, salary levels for the digital skills were hitting the roof and shall stabilize in the near term, while salary levels overall across the industry settle in the next couple of quarters said the TeamLease Digital CEO.
He added that the eventual normalization of salary hikes is around the corner and the same shall return to the pre-Covid levels.
According to the big IT Indian players like TCS, Infosys, Wipro, Mindtree and Larsen & Toubro Infotech expect that over the next two quarters, the attrition rates will stabilize.
Salary Hikes In The Last Fiscal Year
Raise between 30 per cent and 70 per cent were given to retain the talent. This in some cases also shoot till 100 per cent. Compared to the pre-pandemic range of 10-15 per cent, the share of retained employees had gone up to 40-50 per cent in fiscal year 2021-2022, said Gaurav Vasu, chief executive of IT market intelligence firm Unearthinsight.
Even the offer rejection was at an all-time high of 40-45 per cent.
He said that “From May to July (2022), we have seen tech hiring stabilising due to slow down fears plus freshers hired last year are now moving from training to projects. Given the economic scenario, both companies and employees are cautious, hence attrition would stabilize”.
As compared to 80-100 per cent, 30-40 per cent retention hikes are given for niche and super-niche high performers.
Vijay Sivaram, CEO, Quess IT Staffing said that “Of late, we are seeing organizations clearly sending out messages that they will not opt for a significant percentage of hikes. We are seeing order moderation in terms of how the hikes are back to the 25-40 per cent levels”.
He said that “We see customers telling us that we will not offer more than 30-35 per cent for certain roles, which means that there is some sanctity in the way that offer mechanisms are being processed”.