A report by brokerage and research firm Elara Capital states that Coforge, L&T Infotech (LTI) and Persistent Systems (PSYS) have given salary hikes in double-digits in FY22, the highest in the past four years.
The median wage rise in FY22 was 2.4x five-year average wage increase for midcap Indian IT companies as supply-side prompted substantial salary hikes.
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Companies with biggest hikes
Coforge hiked salaries the most at 27.2% year-on-year (YoY).
L&T Infotech hiked its employees’ salaries at 18.3%.
It is followed by Persistent Systems at 14.5%, Mphasis at 9% and Mindtree at 7%.
On FY17-22 salary CAGR (compound annual growth rate), LTI/Coforge are at the top with Mindtree and Mphasis at the bottom.
Pyramid restructuring
Employee pyramid restructuring took place across the industry with Mindtree (MTCL) leading the pack.
Pyramid restructuring refers to having a larger number of employees with less experience and fewer employees with more experience at the top.
This leads to a reduced wage bill and can be implemented as part of the firms’ strategy to cut costs.
Most wanted skills
In FY22, employee growth has exceeded the median salary growth.
This is indicative of a quicker fresher addition (pyramid flattening) versus the past four years.
IT giants paid top compensation to lure skilled workers in areas such as cloud-computing, digital payment infrastructure, cybersecurity and cryptocurrency transactions.
Common themes
The report noted some common theme-threads in a comparative analysis of tier-II IT companies’ annual reports.
IT companies are favorably positioning themselves on engineering capability/R&D service which may emerge as key growth drivers in the next few years.
Further, offshoring spiked sharply and travel expense, as a percentage of revenue, has spiked for most plays, but is still far below pre-Covid level.
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