IT employees rue lesser pay hike even as companies show good growth

As the world celebrates International Labour Day, acknowledging worker rights, Indian information technology workers are observing a struggle of a different kind – seeking respectable salary increments.

The IT industry was projected to give a single-digit increment of 9.6 per cent for 2018, according to the Aon salary increase survey. However, employees working with major IT firms in India rue that the average salary hike they have received has been less than five per cent and in even many cases there have been no hikes at all.

At the entry level, salaries have been static for the past 10 years. Experts say the trend will continue, or become worse in 2019.

Many employees of Capgemini, one of the largest IT services and consulting companies, took to Twitter to vent their frustration saying that increment for them has either been nil or even negative.

“I have been with the company for more than two years. Last year also the increment was not so great but this year it was a bolt out of the blue. They have sent me the letter which stated ‘we are pleased to inform you that your salary has been increased to’ with a figure which was actually Re1 lesser than my earlier cost to company,” said a furious Capgemini employee, who did not wish to be named.

The company however told Business Standard that its employee remuneration is defined in an objective process, consistent with industry norms to ensure it is aligned with customer needs, business priorities, and the overall industry evolution. “Annual increments are determined by individual performance and potential, and the strategic business goals of the company,” it said.

Even Tata Consultancy Services, which became the first Indian IT company to cross the $100-billion market cap had announced a salary hikes in the range of 2-6 per cent depending on the geographies. This has not been taken well on Twitter and Facebook with Tweeple advising the company that if it did not give proper hikes and recognitions in long run it’s going to lose innovations. When contacted, TCS declined to comment on the issue.

HR experts say that currently there’s an excess supply of manpower with generic skills which is why the salary hike across the industry continues to remain subdued. “Companies are giving out meagre salary raises to make employees leave. Earlier, they were worried about people quitting but now the attrition rates have come down to manageable levels of 10-12 per cent. They are happy with the below 15 per cent attrition rate because whenever a person leaves them, they are replaced with a lower cost person,” said Kris Lakshmikanth, founder, Head Hunters India.

For Capgemini, the actual salary hike cycle used to be from January, but the company had communicated to its employees that it would be moved to April from this year in order to align with the rest of the industry.

“Sometimes, if the company is going through a rough patch, hikes can be affected but the worst part is that no one is communicating about the zero pay hikes. Employees are more disappointed because they have not been given any explanation from the company regarding this,” said another person working at Capgemini.

Angry techies expressed their displeasure on Twitter with #capgeminibetraysemployees accompanying their tweets. While some asked for the notice period to be reduced to one month so that they could look for new jobs, others joked even Paytm gives more cashback than Capgemini’s dismal increment. This at a time when the company has started the year on a strong note posting a growth of 7.2 per cent in constant exchange rates.

Even though Infosys, India’s second largest IT services company has announced a pay hike with effect from April 1, it is applicable to employees of certain bands, especially junior and middle level, who account for around 85 per cent of its total workforce. For the rest, the compensation revision will be effective from July 1. However, the Bengaluru-based company last month had also announced a $10 million (Rs 652 million) bonus payout for its employees.