Infosys has effected an average salary increase of around 5% for its employees starting July for the current fiscal after a delay of two months while the high performers are likely to get a hike in the 10-12% range, sources indicated.
Infosys has effected an average salary increase of around 5% for its employees starting July for the current fiscal after a delay of two months while the high performers are likely to get a hike in the 10-12% range, sources indicated. However, salary hikes for senior employees coming under the J7 level has been deferred, sources added. Infosys, which generally gives out its salary hike only in April has deferred it by two months. This salary hike by the company mirrors the average of the Indian IT industry which has giving out annual increments in single digits for the last four to five years. A e-mail sent to the company seeking their response to this development remained unanswered. However, this time Infosys will not be giving any increments for certain group of employees. In an earlier interview with FE, Richard Lobo, executive vice president, Head HR – Infosys, said, “There will be a percentage of people who will not get anything this year.” This strategy of not giving annual increments is part of its revised strategy to differentiate between the performers and rest. Infosys had an employee base of little over two lakh at the end March 2017.
This decision by Infosys has got to do with the broad changes in the sector with the industry growth rate coming down to single digits and stronger focus on people with skills which are in sync with business requirements. Lobo said the shift in thinking is linked with the budgets available to give out the salary hikes. “Today, one does not have the flexibility to give out lots of money,” he remarked.
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Infosys’ peer Wipro has also given out salary hikes which is in single digits. On the hand, Cognizant has delayed salary hikes for employees by three months. The company which gives out its annual increments generally in July has pushed it to month of October. Along with the delayed hikes, the promotions are also going to be delayed at Cognizant. Cognizant has already announced voluntary separation package for those employees at the director to senior vice president level. The delay in salary increase comes at a time when the $150 billion plus Indian IT industry employing around 3.8 million people is staring at a single digit growth rate. Nasscom has projected the industry growth rate to be in the range of 7-8% for FY18 with net employment addition of 1.5 lakh people.