Salary increases and bonuses for the Indian IT services sector have started to decline!! Tech firms have reduced hiring by 63%, and the cohort of software products has reduced hiring by 58%. This overall decline in employment activity has tamed the talent competition. According to Xpheno’s data, there has been a general decline of 60%–70% in the number of bids for talent. The increases in FY24 will remain below the peak experienced in FY22 and FY23.
This pattern is also evident in the fact that this year’s promotions and increments, which occurred last year out of order and out of cycle, are being restrained. “Talent that was hired last year with unheard-of package increases will confront a stricter revision scale this year. However, 2% to 3% of the company will still suffer higher rates as a result of being outliers on a crucial project and possessing a specialised skill set or tech stack experience,” says Karanth.
According to A R Ramesh, Director of digital business solutions, professional staffing, and global engagement at Adecco,
The irrational price increases from earlier this year are becoming more commonplace. “We predict that future raises will be more in line with inflation trends for career changes and also more geared at keeping the current talent. Many businesses also give out the entire variable compensation. The market reality is reflected in the low demand for new workers. The demands are still high even if they are currently 30% lower than they were at their height one year ago. Companies must therefore make sure that the necessary talent is motivated and retained, he continued. Experts also point out that, if there isn’t a big increase in demand, this may very well continue beyond FY24.
“The decline in hiring velocity and volume has led to a decline in offer and counteroffer negotiations. Market talent who previously had to choose between 7 to 8 active offers now just has 2 to 3 options. After a period of a talent-controlled employment market, the pendulum has obviously turned in favour of the employer, according to Kamal Karanth, co-founder of Xpheno.
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Average pay increases, which were in the range of 11% to 14% for specific experience levels and skill sets last year, are predicted to fall to the 5% – 8% range this year, he continued. The insane salary increases and bonuses coupled with skyrocketing attrition are now slowing down for the Indian IT services industry. This is consistent with the main four providers of IT services cutting back on employment. According to HR experts, the remuneration packages have already decreased and will continue to do so through FY24.
Data from the specialised staffing company Xpheno shows that since April 2022, hiring activity for the IT Services cohort has decreased by 41%.According to Karanth, the expectation for pay increases this year is modest in compared to the numbers from last year, and he predicts that they will stay at this level until FY24. “Over last year’s averages, a relative decline of 30%–40% is anticipated this year. Follow our site for daily updates.