This fiscal, software firms are offering hikes of 18-22% to those jumping jobs, while earlier, such candidates would command an increase of over 40% — even up to 100-120% — in remuneration, according to data from staffing firms accessed by ET.
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The biggest decline in compensation is for those with legacy coding skills, while demand and commensurate pay for those skilled in artificial intelligence (AI) or cloud infrastructure areas continues to be high, recruitment experts said.
“Roles such as data scientist, full stack developer or data engineering will continue to see demand,” said Aditya Mishra, chief executive at CIEL HR, a technology hiring firm. However, even employees who could earlier “easily expect 70-100% hikes, will find that it has come down to 30-40%, and even 15-20% in some cases.”
The abrupt decline in compensation comes as the technology sector grapples with a near-decadal low in revenue growth. India’s top four IT companies — Tata Consultancy Services, Infosys, HCLTech and Wipro — have seen a cumulative reduction in headcount of nearly 21,000 people amid ongoing uncertainty in technology spending. IT majors including Infosys and Wipro have also decided to skip campus placements this season, to focus on better utilisation of existing workforce.
In contrast, only last year, IT companies riding high on surging demand fuelled by the pandemic were engaged in a frenetic scramble for talent. They were poaching from rivals and offering unprecedented salary hikes as they struggled to deal with sky-rocketing attrition.
As demand cools, the average salary range for engineers with four to seven years’ experience has reduced to Rs 10-26 lakh per annum, from Rs 15-32 lakh at the end of 2021-22, showed data provided by specialist staffing firm Xpheno.
“Employers have tightened their negotiation ranges to the typical 20-30% hikes for most roles. Candidates with higher hike expectations are dropped from the funnel or pushed further down the shortlisted queue,” said Anil Ethanur, cofounder of Xpheno.
The IT sector has gone from being a job seekers’ market to an employers’ market, according to recruitment experts. Further, “an influx of talent returning from the US, and willing to accept offers at 30-40% lower compensation due to the prevailing economic conditions,” is also skewing the market in favour of the employers, according to Krishna Vij, business head for IT Staffing at hiring firm TeamLease Digital.
However, those with specialised skills continue to be in high demand even in a bearish job market. This applies to specific roles in cloud computing, full-stack engineering, data analytics, data science and other critical positions, leading to more competitive compensation offers.
Salary increments (within companies) for these sought-after roles may average between 18-22%, recruiters said, significantly exceeding the general estimation of 6-8% increments for the fiscal.
According to TeamLease’s Vij, investment in digitisation has resulted in cost savings through process automation, efficient resource allocation and improved operational workflows. “Companies are directing these investments toward hiring specialised talent in areas like AI and cybersecurity, resulting in salary hikes as high as 35-40% for these niche roles,” she said.
Industry experts noted that cross-hiring across top and mid-sector IT firms will be muted as growth has been consistently impacted across the IT industry.
“While equilibrium has not been reached in terms of growth among the top tier and mid-sized companies, large firms have relatively high bench strength and, hence, they will continue to use the existing workforce, reskilling them and using the available resources — not filling even those open positions,” said CIEL’s Mishra. “Mid-sized or smaller IT firms are still hiring, but demand and hikes have also moderated, given the market supply.”