Why IT professionals should moderate their salary hike expectations
If you are an IT professional, you may want to keep your expectations low when it comes to salary hikes in the coming year.
The crazy salary hikes and bonuses given over the past couple of years by IT companies could taper off, media reports say.
This corresponds with the fall in hiring among the big four IT services players—Tata Consultancy Services, Infosys, Wipro and HCL Technologies. HR experts believe that the compensation packages are already down and will stay at these levels even for FY24, Business Standard said in a report.
How steep has the drop in hiring been?
According to data from Xpheno, a specialist staffing firm, the IT services cohort has registered a 41% drop in hiring activity since April 2022. Tech startups have slowed down their hiring by 63% and the software products cohort has dropped hiring action by 58%. This overall drop in hiring action has softened the talent war. Xpheno’s data suggests an overall drop of 60%-70% in the number of offers chasing talent.
Till when are compensation hikes likely to remain muted?
The report said that hikes could remain muted till the financial year 2023-24, which begins in April next year, assuming there is no significant spike in demand.
So, what sort of compensation hikes have IT companies given out?
Most IT firms have announced single-digit average salary hikes. However, they maintain that some segments will see double-digit hikes.
For instance, TCS announced a salary hike of 6-8%. Cognizant rolled out salary hikes of 7-10%. Of course, these are average hike numbers and in certain bands this becomes double-digit, too. But companies have said that the need for giving out large hikes has come down. Indeed, future hikes are likely to be in line with inflation.
What have IT firms themselves said about compensations?
Milind Lakkad, Chief HR Officer at TCS, said earlier this month that India’s largest IT exporter is likely to see a slowdown in attrition levels. This, in turn, should bring down the need to roll out large salary hikes.
“We believe our quarterly annualized attrition has peaked in Q2 and should see it taper down from this point, while compensation expectations of experienced professionals moderate,” said Lakkad.
“Our investments in capacity building and organic talent development have allowed us to substantially grow our business ahead of headcount addition this quarter,” he added.
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