In contrast, many larger IT firms have restricted their salary increases to a range of 5% to 9%.Large IT companies offered double-digit hikes in 2021-22, when they were striving to retain talent to meet the increased demand brought about by the pandemic. Cyient, for example, doubled its hike 10.4% in 2023-24, while KPIT’s average increment rose by 60% to 16% during the same period.
Pareekh Jain, CEO and lead analyst at Pareekh Consulting, attributes this trend to mid-tier companies’ reliance on lateral talent rather than freshers. He expects the hikes to moderate but believes these companies will continue to offer better salaries than their larger counterparts. “Many mid-tiers pay higher salaries for junior or mid-level roles in comparison to bigger firms to attract talent from bigger firms. Mid-tier IT firms want to maintain that gap to retain talent by giving higher hikes. This could also indicate that mid-tiers are more confident and want to retain talent when growth is expected to return,” Jain said.
Sunil C, the India country manager at Adecco, said that some employees at mid-cap firms have received salary raises of 20% to 25% in 2023-24. He attributes this trend to the leaner structures of mid-tier companies, which enable them to make decisions more quickly. “These companies are more likely to take calculated compensation risks to fuel growth compared to larger counterparts,” he said.
Although increments are moderating in the mid-tier segment, they remain competitive. Persistent Systems, for instance, rolled out 8.2% in the 2023-24 financial year compared to 12% in the year-ago period which is comparable to what TCS offered during the same year. N Venkatraman, CFO & MD of Happiest Minds, revealed that in the June quarter, 80% of the company’s employees received a high single-digit hike. Happiest Minds, rolled out an average wage hike of 11% in 2023-24, down from 16.8% in the previous year.
