Which IT company gave the highest salary hike to employees? A comparison of 5 firms

Which IT company gave the highest salary hike to employees? A comparison of 5 firms

A report by broker and research company Elara Capital, Coforge, L&T Infotech (LTI), and Pervasive Systems (PSYS) increased compensation by double digits in FY22, the most significant increase in the previous four years. According to the report, severe supply-side pressure forced mid-cap Indian IT companies to roll out significant salary increases, resulting in a median wage increase in FY22 that was 2.4 times higher than the five-year average wage growth.

Coforge increased to pay the most by 27.2% annually (YoY). According to the chart below, L&T Infotech increased employee pay by 18.3%, followed by Persistent Technologies by 14.5%, Mphasis by 9%, and Mindtree by 7%. According to a study by Elara Securities, LTI/Coforge are at the front of the pay CAGR (compound annual rate) for FY17–22, while Mindtree and Mphasis are at the bottom.

In the meantime, these businesses displayed staff pyramid restructuring in FY22, with Mindtree (MTCL) topping the pack. With more employees with less expertise and fewer people with more experience, the pyramid restructures model will result in a lower salary bill and can be used as part of a company’s cost-cutting plan.

According to the research, in FY22, staff growth outpaced median salary growth, indicating faster fresher additions (pyramid flattening) than in the previous four years. Over the past two years, as demand for services like cloud computing, digital payment network, cybersecurity, and cryptocurrency transactions increased, IT companies have paid premium salaries to entice competent staff.

A few common theme threads have emerged in a comparative review of the annual reports of tier-II IT companies, including L&T Informatics, Mindtree, Mphasis (MPHL), Coverage, and Persistent Systems inside Elara’s IT universe, it said in a report on the Indian IT companies.

Information Services Group’s (ISG) Q2CY22 ER&D grew 41%, and most plays saw dual Y – o – y in median employee pay in FY22. As a result, IT companies are favorably trying to position themself on design capability/R&D providers, as coaxial cables may arise as key growth drivers in the coming years. Additionally, offshoring increased significantly, and travel expenses as a % of revenue increased for most of the plays but are still well below pre-Covid levels, according to the note.

These businesses showed signs of employee pyramid restructuring in FY22, with Mindtree (MTCL) taking the lead. With more employees with much less expertise and fewer people with more excellent expertise, the pyramidal restructuring model will result in lower pay expenses and might be used by businesses as part of a cost-cutting strategy.

According to the research, staff growth outpaced average wage growth in FY 2012, indicating that the past four years have seen a quick renewal of growth (pyramid flattening).

In a comparative analysis of Persistent Systems across the IT universe, the annual reports of Tier-II IT businesses L&T Infotech, Mindtree, Mphasis (MPHL), Coforge, and Elara revealed specific common theme threads, it stated in a note. On Indian IT firms.

Information Services Sector (ISG) up 41% in Q2CY22 ER&D rose, and most plays witnessed double-digit year-on-year increases in median employee salary in FY22, putting IT companies in a good position about engineering capability/R&D service. Additionally, outsourcing climbed significantly, and travel costs as a revenue proportion rose for most plays, but both remained much below pre-Covid levels, according to the note.

According to a survey by international consultancy firm WTW, employees of India Inc. are projected to receive more enormous pay raises in 2023, with employers planning for a median increase of 10%. According to a story in The Times of India, the IT giant Wipro has increased salaries for its workers in India by an average of 5%.

The rise is less than the 9.5% raise the company offered its staff last year. An indication that Indian IT service companies are likely placing greater priority on employment at customer locations is that on-site (close to the customer) employees have gotten a better raise than last year.

Last year, on-site staff had an average 2% pay increase. Due to decreased demand from the international market and new US H1 B visa regulations that favor local employees over foreign ones, the IT industry has slowed significantly.

Due to the industry’s sluggish development, numerous software companies are reducing their workforce. The titan of the IT industry, Infosys, has delayed compensation increases for its staff until July and for senior executives even longer.

Every year, increments are released starting in April, but this year, the increases have been delayed until the next quarter.

For the following year, a rise of 6% is anticipated for China, 4% for Hong Kong, and 4% for Singapore. The research is based on a survey conducted in 168 countries, including 590 organizations in India, in April and May 2022.

Additionally, it stated that only 7.2% of Indian enterprises had predicted good company revenue outlooks for the upcoming 12 months, compared to about 42% of Indian companies. In addition, the following professions are anticipated to be in high demand for hiring during the next 12 months: finance (17.5%), architecture (52.9%), sales (35.4%), and technically skilled crafts (65.5%).

With a 15.1% voluntary attrition rate, India continues to rank among the largest in the region, only behind Hong Kong, it was noted.

“Last year, real wage increases exceeded budgets, primarily due to better-than-anticipated company results and the requirement to keep talent. Higher estimates for 2023, despite the economic headwinds, show cautious business optimism and a still-tight labor market,” according to Rajul Mathur, WTW Consulting Leader India, Work and Rewards.

It is crucial for organizations in India to design a compensation strategy that is in line with macroeconomic realities, sector dynamics, company objectives, and employee expectations because of the country’s dynamic business climate and hot labour market.

To address the present issues with the talent supply, Mr. Mathur continued, “we are seeing companies focused on long-term rewards, creative career progression opportunities, flexible working, and overall welfare.”

edited and proofread by nikita sharma