Salary hike for Infosys, TCS, Wipro, Tech Mahindra employees this year will be interesting to watch

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Employees of Tata Consultancy Services (TCS) work inside the company headquarters in Mumbai March 14, 2013. Of the three major Indian IT services companies (TCS), Infosys and Wipro) in 2016 the Tata Group had the highest, 8-12 percent, for offshore employees and 2-6 percent for onsite.Reuters File

In a few weeks from now, Indian IT services companies will be declaring their March quarter (Q4) and FY2017 results. While investors and analysts would be doing number crunching, employees of TCS, Infosys, Wipro and Tech Mahindra would be keen on the quantum of salary hike. 

Two surveys have indicated that the hike for salaried Indians (across sectors) would be in the range of 9 to 11 percent this year. While Mercer estimated it at 10.8 percent, Aon Hewitt made a projection of 9.5 percent. 

“Over the years, salary increase differentiation across industries has narrowed down. Over the last three years, salary increases have stabilized around 10 percent,” Ruchika Pal, Principal & India TRS Product Leader, Mercer, had said in a statement last December.

Salary hike in 2016

Tata Consultancy Services (TCS) gave the maximum increase last year, with offshore employees getting 8-12 percent while onsite employees got 2-6 percent, the highest among the top three firms.

Infosys employees got 6-12 percent pay hike, translating into an average of 9 percent. For onsite, the hike was a tad lower at 1 percent on an average, as against 2 percent in 2015. 

The scene at India’s third-largest software services exporter Wipro was a tad better. Offshore employees were rewarded with an average pay increase of 9.5 percent while onsite employees got 2 percent. The salary hike was effective from June 1, 2016.

Brexit, H-1B visa, rising rupee woes

Financial year 2016-17 has been tough for India’s $155-billion IT industry. The first major global headwind was in the form of Brexit, while 2017 began on an even tougher note, thanks to the US proposing stringent curbs on H1-B visas, which is bound to raise costs. A fast appreciating rupee hits these companies as most of their earnings are in US dollars.

Nasscom delays FY2018 estimates

The uncertainty prevailing worldwide prompted industry lobbying group Nasscom to postpone its FY2018 revenue projection to May this year. However, brokerage Nirmal Bang Institutional Equities said in a note that the projection could be as low as 6-8 percent. 

“We will be surprised if the growth projection that Nasscom comes up with three months down the line is higher than 6-8 percent. This growth includes expansion not only of India-origin IT services and BPO players, but also of global in-house captives (GICs) of some large customers,” analyst Girish Pai, head of research at brokerage Nirmal Bang Institutional Equities said in a note on February 16.

Hiring trends in December quarter

The quarterly results (December quarter, or Q3) by Infosys, TCS, Wipro and HCL Technologies show that 13,100 employees were hired on a net basis during the quarter.

Infosys, TCS, HCL Technologies and Wipro had 8,68,481 employees as of December 31, 2016 as against 8,55,381 employees at the end of September 2016 quarter. Tech Mahindra had 1,12,866 employees as of September 30, 2016.

The net addition for TCS and Wipro was 6,978 and 4,891 employees, respectively, for the December 2016 quarter while Infosys reported a fall of 66, heralding a new trend in IT hiring characterised by increasing job automation, artificial intelligence (AI) and possible restrictions on H-1B visas by the Donald Trump-led US administration. HCL Technologies saw its employee headcount go up by 1,297 in December quarter.

Results schedule

Infosys will be declaring its Q4 and FY2017 results on April 13, while the others are yet to announce their schedule.

On Monday (March 20), Infosys shares were trading 1.83 percent lower at Rs 1,021 apiece, TCS was down 1.89 percent at Rs 2,479 and Wipro was almost flat at Rs 499.80.

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Employees work at their desks inside Tech Mahindra office building in Noida in the outskirts of New Delhi March 18, 2013 (representational image).Reuters file