This is the time of year when workers anxiously anticipate receiving a positive, fulfilling assessment.  According to market reports, employers' and employees' reactions to the pay increase are not entirely consistent.
 
It becomes rather confusing when we examine the instance of LTIMindtree, one of the biggest and most prominent international information technology services and consulting firms in India. According to reports, the Larsen & Toubro subsidiary is arranging for top employees at LTIMindtree to take a competence exam.

According to reports, this activity is a component of the new framework known as "My Career My Growth," which was unveiled last year. It was initially limited to top executives, but it has now been extended to cover a greater percentage of the company's 86,800 employees. In october 2024, LTIMindtree gave its employees an average 4% yearly raise, which was roughly a month later than it usually does.
 
The poor wage growth in the IT industry
 
Except for LTIMindtree, nearly every employee in the IT services sector faces the possibility of flat or sluggish compensation increases.
 
It is anticipated that salary increases in the IT sector will decrease from 9.8% in 2024 to 9.6% in 2025.  IT-enabled services, on the other hand, will moderate from 9.2% in 2024 to 9% in 2025.  According to the EY Future of Pay 2025 report, which was released on february 27, automation and cost optimization are to blame for this reduction.
 
Lower Increments
Regarding Infosys, this year's 5%–7% raise for employees was smaller than the 10.5% increase in FY22 and less than the 7%–9% increase in FY24.

By the end of March, Tata Consultancy services (TCS) plans to offer an average increase of 4% to 8%.  According to the Economic Times, wipro introduced merit-based wage raises in september for FY25, with top achievers earning an average 8% rise. This will be less than the 9% hike it offered in FY24.

According to a MoneyControl report, the HCLTech case study illustrates a situation in which employees earned raises of about 1% to 2% in FY25.

The reason behind lower hikes
One of the factors contributing to the low appraisal rate is that, according to EY research, the global economy, technical developments, difficulties with artificial intelligence, and cybersecurity rules are all likely to contribute to the IT sector's sluggish growth of 6%–7% in 2025.  Reduced optional expenditure by foreign companies is another issue that is straining the indian IT sector.

 According to research by Kotak Institutional Equities, there is a possibility that industry sales growth may decline by 1% to 2%.  Additionally, the market recovery is crucial for big IT businesses to resume their typical growth rates.  The expectation for growth in FY26 will be constrained.



 
 
 

 
For more interesting updates wa click and follow Indiaherald WhatsApp channel

Find out more:

IT

SIBY JEYYA

03/03/2025 10:08 AM