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IT services and consulting company LTIMindtree has awarded a zero per cent increment to several of its employees for the June-July period, two staffers who did not wish to be named informed DH. This comes as other tech majors, including Infosys and HCL Tech, have delayed their appraisals without giving clarity to staff as to when the hikes may happen.
“There has been no increase in salary even for those who got promoted,” an LTIMindtree employee said, adding that even yearly hikes have been lower than the usual figures. In fact, during Covid-19 the workers received better increments, the source added.
Meanwhile, responding to DH’s query seeking comment, a company spokesperson said: “The percentage of salary increments for each employee is determined by their individual performance, length of service with the company and market competitiveness."
On the other hand, the appraisal cycle for employees at India’s second largest tech firm - Infosys - has been deferred indefinitely and those at HCL Tech are required to wait a quarter longer than usual to see theirs. The exercise typically takes place in the month of April at Infosys while the first quarter of a new financial year brings the good news for the workforce at HCL.
The poor hikes and delays are reflective of the deep slowdown in the larger IT sector in India. Following a hiring spurt in FY22, the sector saw attrition rates to the tune of 25 per cent in FY23 owing to global macroeconomic headwinds such as inflation, recessionary trends and the Russia-Ukraine crisis, industry experts told DH.
The sector saw unprecedented business following a digitisation push by companies globally during the Covid-19 pandemic as corporate clients across the world moved to work from home. Therefore, IT companies hired in excess anticipating similar growth levels in the future, Nikhil Jaiswal, who is a regional director at staffing firm Michael Page India, explained. Currently, product companies are displaying a cautious approach - recruiting only for critical and replacement roles, he added.
“The IT industry projected a rate of 11.8 per cent for 2023 while actual payouts are seen to average between 10.2-10.6 per cent, slightly lower than the 2022 figure wherein actual average appraisal stood at 10.8 per cent,” said Munira Loliwala, Assistant Vice president (strategy & growth), TeamLease Digital. Going forward, organisations will have to look at the need to retain mid-level employees, she added.
The first quarter of FY24 saw the first signs of recovery with attrition rates falling to 14-16 per cent, said Prasadh MS, who heads workforce research at staffing company Xpheno. It will be 3-6 months before the sector sees an uptick on the hiring metric, others added.