In a recent development, Infosys, India’s second-largest IT company, is gearing up to implement salary hikes for its employees, starting from November 1. This decision was unveiled during the company’s Q2FY24 results presentation by Chief Financial Officer Nilanjan Roy. While the conventional practice involved hikes for employees below senior management in April and for those above in July, this time, Infosys has opted for a different timeline. The shift in timing raises questions about whether this change is permanent or influenced by quarterly assessments of the competitive landscape and industry dynamics. Notably, Infosys is the third major IT company in India to announce employee hikes, albeit slightly delayed compared to its peers.
This decision comes amidst a backdrop of strategic shifts in the Indian IT sector. Tata Consultancy Services (TCS), the largest IT company in India, set the precedent by implementing hikes in Q1FY24, with top performers receiving substantial increases ranging from 12-15 percent. Following suit, Wipro deferred hikes from Q2 to Q3, with merit salary raises effective from December 1. Meanwhile, HCLTech took a different approach, postponing hikes for junior employees by a quarter and skipping merit increases for senior management.
Infosys’ announcement carries more significance when considering the company’s recent experiences. Infosys has witnessed a reduction in headcount for three consecutive quarters, even as attrition rates have started to decline. In light of these challenges, Infosys is modifying its approach to hiring freshers and managing its existing resources. The company has decided to skip campus hiring for freshers this year due to a substantial fresher bench and decreased demand in key markets like the US. Instead, Infosys is focusing on upskilling and training its current workforce to enhance utilization rates.
CEO and MD Salil Parekh emphasized the importance of streamlining the employee pyramid and has set a goal to achieve utilization rates of 84-85 percent. CFO Nilanjan Roy highlighted the company’s investment in training a significant fresher bench on Gen AI, showcasing Infosys’ deliberate approach to hiring and utilizing talent resources.
To sum it up, Infosys is set to skip campus hiring this year, with salary hikes scheduled to commence on November 1. The decision is driven by the need to optimize existing resources, as the company grapples with a changing IT landscape and competition. This move aligns with Infosys’ focus on upskilling its workforce, especially the freshers, and streamlining its employee pyramid.
In contrast, we can see a mixed approach in the IT sector, with different companies choosing varied timelines for their salary hikes. This underlines the dynamism and adaptability of the Indian IT industry, which remains at the forefront of global technology services.