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Friday, June 6, 2008

IT salary hikes may not go beyond single digit

Salary increments in IT companies are lower this year than it has been in previous years. In some cases, significantly so.“We have received lower increments this year,” said an employee of Infosys Technologies. “Laterals got only some 8 per cent hike. A company security policy e-mail has also asked us not to share such details with anyone outside.’’ Mohandas Pai, head of education & training in Infosys, said that inclusive of variable pay, the company’s increments this year were in the range of 11 per cent to 13 per cent, against 13-15 per cent last year.
Senior HR executives at some large tech firms confided that their companies are not in a position to increase salaries beyond single digits, at least for a couple of years, till the global markets stabilize. The biggest pressure is seen to be coming from the US, which looks to be quickly slipping into a recession. Almost 60 per cent of the revenues of many Indian IT companies come from the US. Tech firms are increasingly moving away from an equalitarian regime in compensation.

‘‘Companies preferred it as they wanted to keep employees across the board happy, to keep attrition at bay. But in today’s scenario, cost pressures are compelling them to change that approach,’’ said the HR director of a tier 1 tech firm. ‘‘Indian companies have so far been effecting unsustainable salary increments. It has clearly hit a correction mode this year,’’ says B S Murthy, CEO of hiring firm Human Capital. Wipro’s average salary increments are expected to be in the range of 8 per cent to 10 per cent against 12-14 per cent last year.
‘‘Pay hikes expected to happen in August will be some percentage lower than the previous year’s,’’ says Anindya Shee, head of compensation & benefits in Wipro. And if lower increments make employees unhappy, there’s little they can do about it. In previous years, they would have jumped into another job at a significantly higher salary. Now, with IT companies no longer hiring as they were, nor offering any such hikes, they have to be content with what they get.

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