FY24 IT Pay Hikes Expected to be Reduced to Between 8%-10% Due to Increased Staff Costs


Employee salary hikes across India’s Information Technology (IT) sector is projected to take a hit in Fiscal Year 2024. According to HR experts, 8-10% hikes are expected as opposed to the 10-11% hikes of last year. The primary cause for this downward trend is attributed to skyrocketing staff costs in FY23, combined with the global economic uncertainties and other business challenges.

Korn Ferry India’s Navnit Singh, chairman and regional managing director, states that the high demand environment of 2021-2022 caused a level of hikes to vastly increase, but for FY24, salaries will remain between 8-10%, with majority of employees are expected to receive less than 10%. Similarly, Adecco’s AR Ramesh, director of managed services and professional staffing, predicts the average salary hike in the IT sector to be 8-9%.

Businesses must also take into consideration current market conditions and the cautious hiring decisions in order to craft a competitive yet sustainable salary strategy. Sunil C, CEO at Teamlease Digital, believes that due to the cost challenges many companies face, middle and senior management will likely receive more conservative hikes. Additionally, Crisil’s credit rating report states that nearly 70% of an IT company’s total cost is related to employee expenses and this is a sign of diminishing salary treatments in the upcoming fiscal year.

Additionally, internal job switching normally ensues wage increases; however, due to the aforementioned phenomena, employees are now more receptive to the post-pandemic job market, with mild requests for a 20-30% salary bump instead of the 100% increases seen at the start of the pandemic. Thus salary hikes for lateral hiring have also become stabilized between 20-25%.

Overall, the combination of increased staff costs, uncertain economic conditions, and cautionary hiring practices, has led to India’s IT sector having to plot a cautious salary strategy for FY24 — one which looks to balance employee satisfaction with business endurance.