Markets: Eerie calm

Markets: Eerie calm

it is not clear when market sentiment can change; as in the past, it can be quite sudden.
At a turn and yet not

At a turn and yet not

RBI could be tempted to cut policy rate to support growth at its bi-monthly review.

IT, ITeS industry likely to give single-digit pay hikes

Jan 17 2012, 02:27 IST
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SummaryIf employees of the $76-billion Indian IT/ITeS industry were expecting good hikes this year, they are in for a big disappointment.

If employees of the $76-billion Indian IT/ITeS industry were expecting good hikes this year, they are in for a big disappointment. Uncertain global economic conditions and the possibility of lower-than-anticipated growth for the sector may take a hit on wage increments, say head honchos of IT firms and human resource experts.

While hikes were in the range of 11-15% last year, this year’s increments are not likely to exceed the mid to high single-digit range. Appraisals are also likely to be tougher, with no hikes at all for average performers.

Among the top-tier IT firms, Infosys has already confirmed that the possibility of hikes similar to last year are bleak. Speaking to FE, V Balakrishnan, chief financial officer, Infosys, had recently said, “We have to take a view on next year’s growth. In all likelihood, wage hikes will be in higher single digits next year and not in double digits. This is likely to happen for the whole industry.”

Mid-tier IT firms are also expecting hikes to be subdued. MphasiS, for one, says it expects hikes to be in the range of 5-8%. “Employees recognise market conditions and understand things will not be like last year. The industry average will be 5-8% and we will be somewhere in that range,” says Gopinathan Padmanabhan, executive vice president and head, global delivery, MphasiS.

Last year, MphasiS had doled out hikes in the 12-15% range. Infosys had given hikes at an average of 10-13% across levels,while for Wipro, hikes were between 12% and 15%. HCL Technologies gave 12-14% hikes.

But even these single-digit hikes will be reserved only for top performers. Average performers may have to brace for the possibility of not getting a raise at all this year. “Hikes will be limited to 10% at best for top performers and those who are not amongst the top will not get hikes at all. Business leaders will give a much stronger consideration to return on investment of each employee,” says Sangeeta Lala, senior vice-president, sourcing, of staffing company TeamLease Services.

According to experts, the variable pay component of salaries will be increased for employees across the board, with more performance-linked components coming in.

Says Ronesh Puri, managing director of head hunting firm Executive Access, “Variable component of the salary is likely to go up by 10% this year. Hikes will be based more on the performance and variable side.”

At present, 10-20% of an employee’s overall CTC

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