IT Companies in India took a pause from fierce talent competition with huge salary hike offerings due to concerns over the uncertain economic future. The trend might continue for the rest of the year as companies prefer to hire candidates without previous experience and focus on training their current employees.
A huge change from previous months, new hires are getting average increments of 20-25% instead of 40-50%. For hot roles and top talent, active offers have fallen from 6-8 to 2-3. “Tech sector salary hikes for new hires have moderated across the most skill families over the last 2-3 months,” commented Nitin Bhatt, Tech Sector Leader at EY India. The salary slowdown is also a consequence of a decrease in start-up hiring.
This trend is likely to continue for the rest of this year as IT companies reported a large miss in the Q1 2022 (Apr to Jun) margins, almost from 1.5 to 2.4 % due soaring employee costs and an inability to pass them on to clients.
Outlook: As IT sector is facing amounting margin pressures and demand volatility, it’s not likely to see big salary hikes like a few months ago. Companies would spend more time to select younger candidates who have potential and upskill their current workforce.