IT salary increments expected to remain subdued

Salary increments announced by Infosys last week surprised many, as they had expected a steeper jump, given its high attrition rates.

Experts and senior human resource officials say the raises will be similar at other information technology companies.

On average, they estimate wage increases across the sector this year to range between six and nine per cent.

“The years of double-digit salary growth are past.

"I don’t expect any company to offer more than a five-six per cent average wage rise this year, given there is a clear trigger signalling a steep rise in demand and increasing automation has started impacting the hiring outlook of the sector,” said a senior official at one of the top five Indian IT services companies.

Last week, Infosys said it would raise salaries 6.5 to nine per cent for its employees in India for 2015-16, effective Wednesday. For onsite employees, salaries would be raised about two per cent.

The numbers are similar to what the company had offered last year (six-eight per cent for offshore employees and one-two per cent for onsite employees).

Apart from Infosys, Tata Consultancy Services also follows the April cycle for its annual wage increases. City-based IT services company Wipro announces its annual increments in two phases -- one in July (for junior and middle-level employees) and another in October (for senior employees).

HCL Technologies also follows the same cycle.

According to sources at TCS, the company is finalising increments, which would be announced by the end of this week or at the beginning of the next.

This year, it is expected high performers (band A) will ret a rise of about 10 per cent, while those in the B and C bands will record a salary increase of five to eight per cent.

“There’s a demand-supply mismatch, with the supply much higher than the demand,” said Kris Lakshmikanth, chairman of Headhunters India. “Most IT services companies have not been hiring in big numbers through the past two years, which reflects automation has started showing an impact.”

In its annual strategic review announced in February this year, sector body Nasscom had pegged the sector’s exports growth at 12-14 per cent for FY16, lower than the 13-15 per cent projected for FY15.

Experts say employees with special skills could expect far better increases, as last year. “I believe there will be pockets where increases would be higher.

"People with specialised skills will benefit more, as organisations will openly articulate they are willing to reward certain skills vis-à-vis others,” said C K Guruprasad, principal at Heidrick & Struggles.

Additionally, experts believe that automation has started to replace human effort more effectively than before and thus most companies are looking to remain lean, for which they are neither hiring in big numbers nor giving big hikes to retain employees.