Indian IT sector employees should brace for flat salary hikes and deferred increments in 2024. India’s information technology (IT) sector, valued at $250 billion, is predicted to witness stagnant salaries in 2024 due to the impact of global challenges on company operations. The sector, known for being a major employer in the country, is also expected to experience a slowdown in hiring activities.
According to data sourced by ET from a leading hiring firm, IT companies are likely to offer average salary appraisals ranging from 8.4% to 9% this year, similar to the increments seen in 2023 at 8.5-9.1%.Munira Loliwala, AVP – strategy and growth at Teamlease Digital, mentioned that most companies are likely to defer these increments to the end of the first fiscal quarter, a deviation from the usual practice of salary hikes in April.
The focus within the IT sector currently revolves around stabilizing headcounts, with projections indicating either flat or negative growth in headcount for the year. While there was a gradual increase in salary increments from 8.8% in 2021 to 9.7% in 2022, it decreased to 8.5-9.1% in 2023.
Loliwala highlighted that many large multinational companies implemented moderate hikes towards the end of 2023, averaging around 7% for most roles. Companies like Infosys, Wipro, HCLTech, and TCS followed different approaches regarding pay hikes, with some opting to skip or selectively roll out increments based on employee tenure.
For example, Infosys announced raises averaging under 10% in December, effective from November, with certain employees receiving minimal single-digit increases.
Infosys opted not to provide raises to junior or mid-level staff, while HCLTech and Wipro excluded employees in mid- or senior-level positions. Tata Consultancy Services (TCS) implemented salary hikes ranging from 6-8%, with exceptional performers receiving double-digit increments.
IT firms have been contending with a significant downturn in revenue growth and a decrease in headcount over recent quarters, with major players like TCS and Infosys abstaining from campus recruitment last year.
The decline in global demand amidst macroeconomic uncertainties and inflation in developed markets has led to an unprecedented slowdown in technology spending. Consequently, IT companies are seeking ways to enhance gross margins, with employee expenses representing the largest portion, comprising 50-60% of total expenditures.
Loliwala pointed out that Global Capability Centres (GCCs) of multinational corporations are influencing the subdued hiring trends in the Indian IT sector. GCCs in India are expected to witness average salary hikes of 10-10.1% this year, showcasing their impact on the industry.
Reports suggest that GCCs currently employ approximately 1.66 million individuals, with a majority consisting of tech talent. Additionally, a significant number of individuals in the sector are engaging in certification and training programs to upskill themselves, aiming for better appraisals and career growth.
The rise of tech talent in Banking and Financial Services is identified as a key factor contributing to higher salary increments within the sector, with projections indicating upper-end hikes of around 11.1% this year.
According to data sourced by ET from a leading hiring firm, IT companies are likely to offer average salary appraisals ranging from 8.4% to 9% this year, similar to the increments seen in 2023 at 8.5-9.1%.Munira Loliwala, AVP – strategy and growth at Teamlease Digital, mentioned that most companies are likely to defer these increments to the end of the first fiscal quarter, a deviation from the usual practice of salary hikes in April.
The focus within the IT sector currently revolves around stabilizing headcounts, with projections indicating either flat or negative growth in headcount for the year. While there was a gradual increase in salary increments from 8.8% in 2021 to 9.7% in 2022, it decreased to 8.5-9.1% in 2023.
Loliwala highlighted that many large multinational companies implemented moderate hikes towards the end of 2023, averaging around 7% for most roles. Companies like Infosys, Wipro, HCLTech, and TCS followed different approaches regarding pay hikes, with some opting to skip or selectively roll out increments based on employee tenure.
For example, Infosys announced raises averaging under 10% in December, effective from November, with certain employees receiving minimal single-digit increases.
Infosys opted not to provide raises to junior or mid-level staff, while HCLTech and Wipro excluded employees in mid- or senior-level positions. Tata Consultancy Services (TCS) implemented salary hikes ranging from 6-8%, with exceptional performers receiving double-digit increments.
IT firms have been contending with a significant downturn in revenue growth and a decrease in headcount over recent quarters, with major players like TCS and Infosys abstaining from campus recruitment last year.
The decline in global demand amidst macroeconomic uncertainties and inflation in developed markets has led to an unprecedented slowdown in technology spending. Consequently, IT companies are seeking ways to enhance gross margins, with employee expenses representing the largest portion, comprising 50-60% of total expenditures.
Loliwala pointed out that Global Capability Centres (GCCs) of multinational corporations are influencing the subdued hiring trends in the Indian IT sector. GCCs in India are expected to witness average salary hikes of 10-10.1% this year, showcasing their impact on the industry.
Reports suggest that GCCs currently employ approximately 1.66 million individuals, with a majority consisting of tech talent. Additionally, a significant number of individuals in the sector are engaging in certification and training programs to upskill themselves, aiming for better appraisals and career growth.
The rise of tech talent in Banking and Financial Services is identified as a key factor contributing to higher salary increments within the sector, with projections indicating upper-end hikes of around 11.1% this year.
