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Salary increments at IT companies may fall to 2% this year

In the technology industry, the career ladder isn’t the only important attribute disappearing too quickly: Additional digits on payslips may be the next to go as wage-growth at software companies increasingly moves in lockstep with recent investor returns on these bellwethers.

Annual pay-raises in companies that once set wealth-creation benchmarks for both investors and employees may barely breast the consumer-inflation tape this year, reflecting persistent headwinds for a $150-billion industry built primarily around the cost end of the value spectrum.

Increases may be as low as 2% in some cases and hover about 6% for most employees, shrinking from about 10% last year, say industry experts and hiring and staffing managers.

“The industry is under significant pressure — even without factoring in the H-1B considerations. If the past three quarters are any indication of what awaits the industry, companies will find it very difficult to have the same level of performance awards as last year,” said Anandorup Ghose, Partner at Aon Hewitt India.

India’s most visible and globalised industry has harnessed low-cost engineering talent, an English-educated workforce, and a gradually improving telecommunications infrastructure to establish an outsourcing business that is the world’s largest.

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