Data from staffing firms, as reported by ET, indicates that software firms are currently offering 18-22% hikes to job changers, a significant drop from the previous year when these candidates could command increases ranging from 40% to as high as 100-120%.
The most significant dip in compensation is being witnessed among individuals with legacy coding skills. However, those skilled in areas like artificial intelligence (AI) and cloud infrastructure continue to enjoy high demand and corresponding pay scales, recruitment experts have said.
According to Aditya Mishra, CEO of CIEL HR, a technology hiring firm, roles such as data scientists, full stack developers, and data engineers will continue to experience strong demand. Nevertheless, individuals who used to anticipate job switch hikes of 70-100% are now facing lower increments of 30-40%, and in some cases, as low as 15-20%.
This drop in compensation comes amid a significant slowdown in revenue growth in the technology sector, with India’s top IT companies, including Tata Consultancy Services, Infosys, HCLTech, and Wipro, collectively reducing their workforce by nearly 21,000 employees. Some IT majors, such as Infosys and Wipro, have chosen to skip campus placements in the current season to focus on optimizing their existing workforce.
IT sector salary hikes
In stark contrast to the previous year, when the tech industry was grappling with soaring demand triggered by the pandemic and engaged in fierce talent acquisition battles, the current landscape has shifted. The sector is experiencing a reduction in demand, leading to a notable decline in the average salary range for engineers with four to seven years of experience.
Data from specialist staffing firm Xpheno reveals that the salary range for these engineers has decreased from Rs 15-32 lakh per annum at the end of 2021-22 to Rs 10-26 lakh per annum. Employers have adjusted their negotiation ranges, typically offering 20-30% salary hikes for most positions. Candidates with higher salary expectations are either removed from consideration or moved lower down the shortlist.
Recruitment experts suggest that the IT sector has transitioned from a job seekers’ market to an employers’ market. Additionally, an influx of talent returning from the United States, willing to accept offers at 30-40% lower compensation due to prevailing economic conditions, is further favoring employers, according to Krishna Vij, business head for IT Staffing at TeamLease Digital.
Specialized skills in demand
Even in a challenging job market, individuals with specialized skills continue to be highly sought after. Specific roles in areas such as cloud computing, full-stack engineering, data analytics, data science, and other critical positions are commanding more competitive compensation offers.
Recruiters suggest that salary increments for these in-demand roles within companies may average between 18-22%, a significant increase compared to the general estimate of 6-8% increments for the fiscal year.
Investments in digitization have allowed companies to achieve cost savings through process automation, efficient resource allocation, and improved operational workflows. As a result, organizations are directing these investments toward the recruitment of specialized talent in fields like AI and cybersecurity, leading to salary hikes as high as 35-40% for these niche roles, according to TeamLease’s Vij.
Industry experts observe that cross-hiring between top-tier and mid-sized IT firms will be subdued, as growth has consistently been impacted across the IT industry.
While a growth equilibrium has not been reached among top-tier and mid-sized companies, large firms have a relatively strong bench strength. Consequently, they will continue to utilize their existing workforce, focusing on reskilling and optimizing available resources, rather than filling open positions. Mid-sized or smaller IT firms are still engaged in hiring, but both demand and salary hikes have moderated due to market supply constraints, as noted by CIEL’s Mishra.