Salaries in the IT sector continue to stagnate as attrition rates continue to fall along with discretionary spends by clients. Data from TeamLease shows that the average salary package for IT freshers has increased by only Rs 90,000 annually over the last five years, standing at Rs 390,000 in 2024, up from Rs 300,000 in 2020.

“The small increase in the average package has nothing to do with domestic IT companies, it’s the doing of the Global Capability Centres (GCCs) who hired aggressively and paid huge premiums,” a top-executive at a staffing company said.

According to data from TeamLease Digital, salaries for IT professionals across all levels have plummeted by 30-40% from their peak.

“Salaries are directly proportionate to the demand supply of skilled workforce in any industry. IT companies have historically been known for their high salaries, but recent trends suggest this might be changing,” Neeti Sharma, Chief executive officer, TeamLease Digital, said.

“The current dip in packages represents corrective action by organisations as they realised the correct metrics,” stated Pasupathi, chief operating officer at HirePro. “During the pandemic, companies experienced substantial expansion, leading to excessive hiring and increased wages. Therefore, what we are currently witnessing in the job market is essentially the repercussions of COVID,” he added.

In FY24, attrition in the IT sector decreased to about 15%, down from 21% in FY23. While many companies celebrated this decrease, it was largely influenced by the tight job market, which made employees hesitant to leave their positions.

“The sharp improvement in attrition rates among major IT companies can largely be attributed to a tight job market, where employees are more inclined to stick to their current roles,” Sarbojit Mallick, co-founder of Instahyre, said.

“Global headwinds in the IT industry, resulting in layoffs, lesser employment opportunities, and newer skills have arrested the attrition to some extent currently. Additionally, companies continue to invest in various retention strategies, including identifying high-risk employees, further supporting the declining attrition trend,” Sharma said.

“Indian IT companies hired an estimated total of 155,000 freshers in FY24, marking a 33% decrease compared to the 230,000 recruited in the previous fiscal year. However, IT companies are considering hiring of freshers strategically – one that gives them fresh talent, hopefully with newer skill sets, at lower costs,” she added.

Infosys hired only 11,900 freshers in the fiscal year 2024, which is a significant drop from the over 50,000 freshers the company recruited the previous year. The company’s chief financial officer, Jayesh Sanghrajka, had told the media in April that Infosys had changed their hiring model significantly. “We no more hire all the freshers from campus. We hire less than half of them from campus and more than half of them off campus,” he said.

India’s leading IT majors—Tata Consultancy Services (TCS), Infosys, and Wipro—witnessed a full-year decline in their total employee headcount for the fiscal 2024. Collectively, these three companies reported a reduction of about 63,750 employees during FY24.