For a long, the companies had the command over the pay and this seems to be changing now. The IT companies have been managing their operational costs by keeping a tight check on the fresher salaries.
With the current package structure, the IT companies find it difficult to attract new talent now at the old packages.
India’s third-largest software major, HCL Technologies has recently taken a step to increase its salary. It has decided to raise fresher pay packages from 3.6 lakh rupees to 4.25 lakh for FY23. This new package would also apply to those freshers who joined the firm in FY22.
Earlier, a mid-sized IT firm Happiest Minds Technologies reportedly increased its fresher salary to 5.5 lakh rupees, which includes a base salary of 4.25 lakh rupees, and the rest being a joining bonus.
Employee costs for the top 5 Indian IT services have touched an all-time high of 2.85 trillion rupees last fiscal, driven by strong fresher hiring and pay hikes. They grew between 15% to 35% for these companies.
Universities that see bulk-hiring noted that differential hiring has gone up. This means that based on a student’s skills, he/she can attract a higher package.
Freshers’ salaries remained stagnant between 2.5 lakh to 3.5 lakh rupees for a decade now. Some employees are seeing their salaries double when they switch jobs. The recent salary hikes are among the highest ever.
To attract fresh talent and keep them for longer to counter the impact of the rising voluntary attrition rate, companies are giving joining bonuses, double-digit pay hikes, and promotions.
Given that the last two years were tough for the industry because of the COVID-19 Pandemic. The sector had seen major layoffs just before the pandemic. Companies are now trying to fill the gap to cater to the strong post-pandemic demand pipeline.
The attrition in IT companies has been at an all-time high. Infosys posted a record attrition rate of 27.7% in the March quarter, faster than the 10.9% in the year-earlier and 25.5% turnover rate in the three months ended 31 December.
Tata Consultancy Services Ltd had reported an attrition rate of 17.4% during the March quarter, Wipro clocked an attrition rate of 23.8% while HCL Technologies reported 21.9%
According to a news report, Infosys plans to have an average salary hike of 12-13%. High potential employees will get increases of 22-23%.
Now even globally, tech talent is being rewarded as never before. Microsoft said it will “nearly double” its budget for employee salaries and boost the range of stock compensation it gives workers by at least 25%, mainly affecting “early to mid-career employees”.
TCS
The salary hikes at TCS are already in double digits and in some cases, it’s upwards of 25%. In the third quarter of FY22, TCS had given a promotion to over 110,000 employees.
TCS has a program called TCS Digital that looks at hiring students with specialization and the pay package starts from 7 lakh rupees.
Cognizant
Cognizant’s Digital Next, for which if selected, a fresher can get a starting pay package of 6.75 lakh rupees.
Wipro
At Wipro, the company announced that at the junior level, promotions will happen every quarter. Wipro Turbo, a similar program from Wipro, can take a student’s salary package to Rs 6.5 lakh.
