Business
Slipping revenue growth due to global economic slowdown may see information technololgy firms turning stingier on salary hikes this year.
Priyanka Golikeri & Pranav Nambiar
Updated : Sep 15, 2017, 02:47 AM IST
MUMBAI/ BANGALORE; Slipping revenue growth due to global economic slowdown may see information technololgy firms turning stingier on salary hikes this year.
Senior and middle level techies, who were used to 50-60% pay hikes only a few years ago, may have to make do with just a rise of 8-10% this year, according to human resources experts.
Kris Lakshmikanth, founder CEO and managing director of Headhunters India, a Bangalore-based HR company, said players like Wipro may go in for an average hike of just 8%.
“This would be a far cry from the past, when the IT sector had seen hikes of as much as 50-70% at the middle and senior levels,” he said.
The third-largest software exporter has also seen its employee pyramid widening with more additions at the bottom.
Bhuvnesh Singh, Sunil Tirumalai and Vikramaditya Narendra, analysts with Credit Suisse, in a report on July 17 said Wipro’s percentage of employees with less than three years of experience has shot up to 47% as of March 2008 from 45% and 41% as of March 2007 and March 2006, respectively.
In addition, the company is grappling with a higher rate of attrition in its global IT business, which has gone up marginally to 18.5% from 17.4% a year back.
But it’s not just Wipro that will see lower increments; even the largest IT company Tata Consultancy Services (TCS) is tightening purse-strings. “HR heads will exercise caution and take a conservative approach,” said Ajoyendra Mukherjee, vice president & head, global human resources at TCS.
E Balaji, CEO of Ma Foi Consultants, said the word “moderation” connotes that a company, which generally gave an annual 25% hike, would now give something to the tune of 15%.
“And companies which usually gave hikes of 15% will now consider giving something in the late single digits such as say 9%,” Balaji said.
For instance, Hyderabad-based Satyam Computer Services gave hikes ranging between 8% and 10% last year against 14-18% previously.