It's raining bonuses, increments for Wipro, Infosys, other IT staff
To counter the high attrition rates in the IT industry, India's leading software giants are overhauling their employee bonuses and increments, offering quarterly promotions and increasing incentives
IT companies, which are battling an all-time high attrition rate post-COVID, are vigorously trying to woo employees with a bouquet of attractive offerings.
While Wipro Ltd is overhauling its employee bonuses and increments to rein in high attrition and attract fresh talent, IT giant Infosys has increased its internal promotions by 3.5 times compared to last year and doubled its employee stock ownership plan (ESOP) coverage.
Reports in business dailies said that Infosys may offer a 12-13 per cent hike for some staff, with top performers getting more. The company had a record attrition of 27.7 per cent in the March quarter, which is much higher than 10.9 per cent a year earlier and 25.5 per cent in the December quarter.
Meanwhile, Tata Consultancy Services (TCS), the largest information technology (IT) services company in India, whose attrition rate stood at 19.7 per cent, which had gone up from 17.4 per cent last quarter, has increased their employees’ salary by upto 8 per cent. After their annual compensation review, employees received salary increased 5 to 8 per cent, with top performers getting even bigger hikes.
In fact, they went on a hiring spree adding 14,136 employees for the first quarter of the current financial year, with their workforce going up to 606,331 as on June 30, said a report in a leading business newspaper.
While HCL Technologies’ attrition rate was 21.9 per cent in the Jan-March quarter. For Wipro and Tech Mahindra, the attrition rates stood at 23.8 per cent and 24 per cent, respectively.
Experts are of the view that a rapid digitisation in the wake of the pandemic has driven the demand for IT talents; and early career IT professionals to mid and senior-level executive, seem to have a lot of job opportunities in the software tech space.
Moreover, many professionals are moving away from legacy IT companies to startups with faster growth opportunities, experts have said. According to news reports, every IT professional in India has 2.5 offers at a given point in time. The availability of such offers has pushed young professionals to look for tech jobs in new-age start-ups.
Focus on reskilling and retaining talent
The IT industry, has been focussing on reskilling and retaining talent using various monetary and non-monetary compensations.
Wipro’s plans to offer employee promotions every quarter was announced by the Wipro CEO and MD Thierry Delaporte on April end after the announcement of their results. They decided to increase the frequency of promotion cycles for 70 per cent of their colleagues in junior bands to a quarterly basis. It is now expected to boost salaries of most of its workforce by 10 per cent in September, with the top performers receiving more than 15 per cent hikes.
The 10 per cent is expected for a larger chunk of the employees, while top performers will get much more. It can be 15 per cent plus depending on pay scales. These efforts are seen as an attempt by the company to retain a hold on to its people.
The hikes are reportedly expected to be rolled out in September, and there are large-scale promotions to be rolled out in July. The quarterly promotions are for its top performers upto mid-management level. The company had a staff count of 243,128 as of March-end.
Infosys, India’s second-largest software services firm, may offer a 12-13 per cent hike for some staff, with top performers getting more. Brushing off the attrition rates of 19.7 per cent in the June quarter as seasonal, the TCS leadership has ostensibly issued a pay hike of 5-8 per cent. Top performers have received higher increments, according to the firm.
All IT companies are now focusing on hiring freshers. While TCS has hired over 1 lakh freshers in FY22, Infosys said it hired 85,000 freshers in the last fiscal year, and it would hire over 50,000 in FY23, and could even step up during the course of the year.
India’s top four software services companies in terms of revenue –TCS, Infosys, HCL Tech and Wipro – have hired about 2,20,000 freshers in the last fiscal year.
Meanwhile, analysts said, offering large pay hikes and other employee incentives may negatively affect firms already struggling with rising costs.
ICICI Direct Research, at an earnings preview on July 5, said it expects margins to contract quarter-on-quarter due to the wages hikes and the continued rationalisation of staff costs amid high attrition despite the fact that the industry continues to add record freshers.