This year has been particularly tough for IT employees with companies declining to hire freshers. Well, those working at the organisation are also not having the best time of their lives.
The entire IT sector witnessed a sharp decline in hike growth in 2023, dropping to 9.1% from 10.3% in 2022. Excluding products, the IT/ITeS sector saw the lowest average salary hike at just 8.4%.
In 2021, the average salary hike was 8.8%, which increased to 9.7% in 2022. Last year, the sector saw average increments between 8.5% and 9.1%.
IT companies are offering single-digit salary increments to employees who lack AI-related skills. Further, there is an abundance of entry-level talent who are now equipping themselves with the latest tech and tools. Additionally, rising business costs, coupled with layoffs are making this trend continue this year too.
IT Giants Follow Single Digit Hike Trend
Earlier in May, a Dehradun-based engineer, Akshay Saini, took social media by storm with his critique of the corporate appraisal system in India.
Saini claimed that appraisals are a joke and further urged employees feeling underpaid to switch jobs.
He is not all wrong.
Infosys, which offered an average salary hike of 14.6% in FY22, came down to 9% in FY24. For TCS, the average hike ranged between 7-9% in 2023-24, compared to 10.5% in 2021-22.
Tech Mahindra and HCLTech offered average hikes between 5-7%. Wipro and LTIMindtree are yet to finalise their decisions on the same.
Meanwhile, Accenture has opted not to provide salary hikes for its India-based employees this time.
Well, the story of startups is no different.
Can GenAI Skill Help?
As per the Amazon Web Services (AWS) report, Indian employees with AI skills and knowledge may see salary hikes of more than 54% and those in IT and research and development enjoying the highest pay increases.
Major Indian IT companies, despite substantial generative AI training initiatives, are offering lower starting salaries of around INR 3-4 lakh.
AIM noted that AI engineers with generative AI skills saw a significant 50% increase in their salaries. At companies like Accenture, a generative developer can earn about INR 8.5 lakh per annum, compared to the INR 5-6 lakh that regular software engineers make.
AIM reached out to an employee who works with generative AI at TCS. He said that the company’s pay scale won’t change just for GenAI resources, and the hike is also largely based on the company’s financial performance and business unit budget allocation.
“I believe we may get some good hikes in the range of 25-30% after switching to another company,” the employee added.
Hiring Freeze
Indian IT companies have all recently highlighted their commitment to integrate generative AI into their operations. Top firms like TCS, Infosys, and Wipro have been leveraging technology-enabled training for their employees.
As the companies are offering training programs, they seem to be following Charles Darwin’s survival of the fittest theory to retain employees. So, if an employee falls behind in the race, he is laid off.
During the calendar year 2023, India’s IT sector laid off around 20,000 techies in a manner known as a “silent layoff,” according to All India IT & ITeS Employees’ Union (AIITEU) data.
On the other end, companies have delayed the hiring process. Indian IT companies like Wipro, TCS, and Infosys have delayed the onboarding of 10,000 freshers, and refused to provide a joining date.
As per the Nasscom data, the IT sector will create only 60,000 new jobs in FY24 compared to 2,70,000 jobs that were created by the sector in the previous fiscal year.
Ultimately, the choice is yours – either stay with the company, undergo training, and earn an average salary. Or get laid off, switch to another company, and wait for the same cycle down the road.
