IT Sector May See Cautious Salary Hikes in FY25

Salary increments in India's $250 billion IT services sector are projected to be moderate in fiscal year 2025, as companies navigate a complex landscape of global economic uncertainties, evolving skill demands, and the increasing adoption of artificial intelligence (AI), according to experts.

- Press Trust of India

NEW DELHI:

Industry experts predict an average wage increase of 4-8.5%, a notable step down from previous years, signaling a shift towards more pragmatic compensation strategies.

"The outlook for salary hikes this year is quite cautious," noted Krishna Vij, VP, TeamLease Digital. "Industry players are looking at increments in the 4% to 8.5% range, which is lower than what we've seen in previous years. This slowdown is largely due to global economic challenges, reduced discretionary spending, and shifting business priorities."

Companies are being more conservative with their salary budgets, and many have even pushed their appraisal cycles beyond the usual April-June period, she said, which has made salary revisions less predictable in the current scenario.

"Organizations are shifting to skills-based pay, leveraging Tier II hiring for cost efficiency. Instead of salary hikes, retention bonuses, ESOPs, and project-based incentives are being implemented as compensation strategies," Vij said.

Reed & Willow CEO Janoo Motiani also gave a similar expected hike range, pegging it between 5-8.5%.