After two years of Single-Digit Salary Hikes, Indian IT companies are now offering single-digit hikes for the financial year 2023-24. Major firms like Infosys, TCS, and Wipro have reported modest raises, reflecting a shift in response to clients cutting discretionary spending and increased caution amidst economic challenges, according to a report by the Times of India (ToI). While top performers continue to receive substantial hikes, the majority of employees are seeing a moderation in salary increments.
Indian IT Companies Report Modest Raises as Clients Cut Discretionary Spending
Milind Lakkad, the HR head of TCS, noted during a recent interaction with ToI, “We are one of the few companies to give a hike in April this year. We will continue to do that.” Despite this commitment, the overall trend among Indian IT companies indicates a more conservative approach to salary hikes. The economic uncertainties and the reduction in client spending on discretionary projects have prompted these firms to adjust their compensation strategies accordingly.
Infosys, TCS, and Wipro, which are among the top players in the Indian IT sector, have all reported more restrained salary increments compared to the previous years. This shift comes as a response to the changing economic landscape, where clients are becoming more cautious with their budgets and expenditure. As a result, the IT firms have had to recalibrate their salary hike policies to ensure sustainability and maintain profitability.
Tech Mahindra and HCLTech Maintain Average Single-Digit Salary Hikes Between 5% and 7%
Tech Mahindra and HCLTech have managed to maintain their average salary hikes within the range of 5% to 7%. HCLTech, which reported an average hike of 6.8% in FY22, saw this figure drop to 5% last year. Similarly, Tech Mahindra’s average increment for FY24 stood at 5.6%, down from 6% in the previous year and 5.2% during the pandemic year when other firms were offering double-digit raises.
Pranshu Upadhyay, regional director and head of India technology practice, explained the trend, noting that the moderation in salary increments is a reflection of the current economic environment. The IT industry, which had seen substantial growth and salary increases during the pandemic, is now facing a period of adjustment as companies reassess their strategies and budgets in light of the global economic situation.
Despite the moderation in salary hikes, top performers within these companies continue to receive significant raises as a way to retain talent and reward exceptional contributions. This approach ensures that the firms can maintain their competitive edge and continue to attract and retain skilled professionals, even in a challenging economic climate.
The shift to single-digit salary hikes highlights the need for Indian IT companies to balance cost management with employee satisfaction. As the industry navigates through these economic challenges, companies are focusing on maintaining stability while still providing incentives for high-performing employees.
In conclusion, the move towards single-digit salary hikes by Indian IT companies reflects the broader economic uncertainties and the cautious spending patterns of clients. While firms like Infosys, TCS, and Wipro have reported modest raises, Tech Mahindra and HCLTech have managed to maintain their average hikes between 5% and 7%. This trend underscores the need for IT companies to adapt to changing economic conditions while continuing to reward and retain top talent.
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