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HCLTech isn’t alone in deferring pay hikes. Infosys has also delayed its salary increments to the fourth quarter of the current financial year.
HCLTech’s management confirmed earlier that compensation reviews for senior and management-level employees were skipped in FY24.
India’s third-largest IT services company, HCLTech, is reportedly partially rolling out salary hikes for junior employees during the October-December quarter. Most received modest increments of 1-2 percent, while top performers saw raises of 3-4 percent.
According to a report by Moneycontrol, this is notably lower than the management’s earlier statements, which had promised average annual pay hikes of 7 percent and 12-15 percent increments for top performers.
In FY25, leading IT firms, except Tata Consultancy Services (TCS), have delayed wage hikes, which are typically implemented earlier in the fiscal year. The move appears to be a strategy to safeguard profit margins amidst ongoing challenges, including reduced discretionary spending and a subdued demand environment, the report stated.
Sources told Moneycontrol that HCLTech’s pay hikes have so far been limited to junior employees in the E0, E1, and E2 bands, representing staff with up to 10 years of experience.
However, mid- and senior-level employees (E3 and above) have yet to see any salary revisions. Two employees at the E3 level told Moneycontrol they had not received a salary hike for at least two fiscal years.
HCLTech spokesperson clarified that the information being shared is incorrect and that the company is proceeding as per the plan shared during the Q2 earnings commentary.
What HCLTech Said?
HCLTech in a statement reiterated its commentary from the Q2 earnings conference, saying, “On salary increases….we have decided to go ahead with the increase. It will be along similar lines as what we did last year. This means the increases will be effective in October, i.e., this month. Typically, every year when you look at the review cycle, given the fact that we have a higher proportion of people who come in laterally into our system, who will become eligible for increases at the point of completing a year, the number of individuals eligible for increases during a given cycle is a function of that, plus the performance.”
“If I look at the average for all our colleagues in India, it will be in the range of about 7%. But, as is always the case, increases are linked to performance, and top performers will continue to see double-digit increases in the range of 12-15%. So, that’s the way we have planned our increases. It will all take effect from this month onwards. We have our own comp review cycles, which we follow every year. That’s what we did last year, that’s what we’ll do this year as welL,” the company’s chief people officer Ramachandran Sundararajan had said.
HCLTech’s management confirmed earlier that compensation reviews for senior and management-level employees were skipped in FY24.
HCLTech isn’t alone in deferring pay hikes. Infosys has also delayed its salary increments to the fourth quarter of the current financial year.
