IT Staff Set For Double-Digit Increments

Information technology sector professionals can look forward to better annual increments this year than last time, as well as more opportunities owing to growing demand in emerging segments such as machine learning and robotics, said industry association Nasscom and compensation experts.

Last year, the average salary hike in the IT industry was 6-8 percent, according to Nasscom (National Association of Software and Services Companies).

“This year would see increments of 8-10 across the IT industry, but the talent in niche technologies may get almost double the increments of an average performer,” said Sangeeta Gupta, senior vice-president, Nasscom.

Professional services firm Aon and human resources consulting firm Mercer has also pegged increments for the IT sector at around 10 percent. However, top performers and those with niche skills in areas such as artificial intelligence, cybersecurity and blockchain are likely to command higher salary hikes of up to 20 percent, they said.

Aon said that in its latest estimates for 2019 increments in June 2018, average hikes for the IT sector were projected at around 9.8%. It said the data is showing a positive bias and that the final projections, which are set to come out next month, are likely to be around 10 percent.

“The IT industry is demonstrating a positive outlook this year with a salary increase of 0.6 percent compared to last year. The business outlook exhibits an upswing driven by a greater uptake of solutions focused on automation, analytics, deep domain expertise and cloud deployment,” said Anirban Gupta, senior consultant at Aon India Consulting.

The sector is also expected to see an uptick in hiring. “There was pent-up demand in 2017-18 when most companies were holding on to their hiring plans, but this year we see hiring picking up across the IT sector,” said Gupta of Nasscom.

Infosys, for instance, hired 55,000 people in the first nine months of this financial year, compared with 44,000 in the entire 2017-18. “As of December 2018, our total number of employees stands at 2,25,500, compared with 2,04,100 employees for fiscal ending March 2018,” said Richard Lobo, head of human resources at Infosys.

Jay Hiremath, corporate vice-president, systems design engineering at AMD, said 2019 is expected to be a better year for the IT industry as worldwide demand for qualified engineers is growing and India is recognized as a powerhouse when it comes to engineering talent. “Many engineers and students are proactively putting in the effort to keep their skills current by learning new technologies such as AI and ML.”

As companies seek to retain talent, short-term incentives and higher discretionary spends are being used to reward performers and employees with new-age skills, said, experts. At the same time, they said, a section of the sector which is under margin pressure is adopting a more conservative approach in pay approval for traditional skills.

Mercer estimates suggest an overall increment forecast of 10 percent, with 10.5 percent for IT products against 10 percent in 2018, 9.5 percent in IT services (compared with 8 percent last year) and 8 percent for India-headquartered services firms (up from 6.5 percent last year).

“Clearly, the industry is looking up in comparison to 2018 and there is focus on differentiated rewards,” said Mansee Singhal, rewards consulting leader for high tech, mobility and Sri Lanka at Mercer.

Willis Towers Watson studies indicate that employers are setting aside about 40 percent of their budgets for top performers. “The actual increase for top performers could be in the range of 12 percent-plus and may extend up to 20 percent while for the average it will be around 8 percent,” said Arvind Usretay, director, rewards, Willis Towers Watson India.

Shekhar Purohit, managing director, First Mumbai Consulting, however, said he expected both IT and IT-enabled services sectors to see salary increases of 9.5-9.7 percent.

“Salary increases are now aligned to cost-revenue metrics. Margins are getting squeezed and inflation in India is not a factor while deciding salary increments. In general, overall this business fundamentals-driven decision is better for the industry in the long term,” he said.―India Finance News