Majority of the employees are expected to get the lower end of the range with stringent checks on contribution to business, experts added.
With the great resignation phase of 2021-2022 calming down, chairman and regional managing director of Korn Ferry India Navnit Singh expects a wage correction in the market during the FY24 appraisal cycle.
“Due to the great resignation and high demand environment, the level of hikes had gone up. However, this fiscal we expect hikes to remain between 8-10% with the majority of employees expected to get below 10% hikes,” said Singh.
Similarly, AR Ramesh, director-managed services and professional staffing at Adecco, expects the average salary hike for the IT sector in India to be given in FY24 will be 8-9%, marginally lower by 0.5 to 1% compared to the previous year.
“We expect a muted hike pattern this appraisal season significantly impacted by the global economy and several business uncertainties across industries. Additionally, the current market conditions and cautious hiring will also impact the salary hike trend,” he added.
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ETtechET reported on Tuesday that the fiscal 2023 Q4 earnings are expected to be muted due to longer deal cycles, impact to banking, financial services and insurance (BFSI) sector and seasonal headwinds.
Sunil C, CEO at TeamLease Digital, expects that middle and senior management is likely to get lower hikes during the current appraisal cycle due to the cost challenges faced by the industry. “It is not that employees would have underperformed but the industry itself has not done well over the past few quarters and companies will take a cautious approach on this front,” he said.
According to a report by credit rating firm Crisil, almost 70% of the total cost of IT companies relate to employee expenses, which are expected to moderate in the 2024 fiscal due to cautious hiring.
Coupled with the larger concerns around layoffs in the tech sector, HR experts suggest that for job switches also, salary hikes will normalise to pre-pandemic levels after a period of highly competitive salaries seen in the first half of 2023. Hikes for lateral hiring will remain in the range of 20-25% compared to even 100% hikes seen last year.
“It’s great to see that candidates are becoming more adaptable to the post-pandemic job market, with many now requesting a 20-30% increase in salary when switching jobs. This also reflects the evolving dynamics of the job market and the importance of keeping up with the latest skill-sets to stay competitive,” said Sanjay Shetty, director, professional search & selection, and strategic accounts at Randstad India.
Experts also see the competitive bidding for talent across multiple rounds going down with an increasing number of job interviews being closed within two to three rounds of negotiation.
