Salary increment in India's tech industry has dropped to an average of 8.6 per cent in the fiscal year 2024 as compared to 8.9 per cent in FY23. It is expected to dip further to 8.5 per cent in FY25, said a recent report.
The India Technology Industry Compensation Benchmarking Survey Findings 2024, conducted by Deloitte India and Nasscom across 200 tech firms, also highlighted that the Business Process Management (BPM) industry's increment will also remain same as this year at 8.1 per cent against 8.5 per cent in FY23. It mentioned that as of October this year, 4 per cent of organisations have opted out of giving increments in FY25.
The report cited increased tech investments and global political unrest as the main reasons for year-over-year reductions in salary increments.
Furthermore, bonuses are also projected to decline further in FY2025, averaging 14-16 per cent, with variations based on levels of management. It is majorly because of the impact of varying market factor. However, high-performing employees continue to be rewarded, with payouts ranging from 1.6x to 1.8x that of average performers, the report noted. Promotees can expect an additional 7 per cent promotional increment.
Focus on Retaining Millenials, Gen Z
To align with the generational shift in the workforce, companies are now leaning towards more evolving practices by offering differentiated benefits to combat burnout, integrating AI skills in development, boosting women’s leadership representation, and relooking at their total rewards philosophy.
The tech industry is intensifying efforts to engage Millennials and Gen Z through differentiated benefits, including unlimited sick leave, pet leave, parental leave for non-biological caregivers, fitness memberships, burnout assessments, Pay equity audits, and adaptive office designs.
Industry Stabilises
Overall, the tech industry signed towards stabilisation as the attrition rate significantly lowered to 15.9 per cent against 19.3 per cent in the previous year. The offer drop-out ratio also decreased, and the average drop-out percentage now is 7-9 per cent.
However, this could also be because of reduced hiring in the first half of the year, leading to fewer offers per applicant and diminished negotiation power. Generally, candidates mainly decline offers for compensation, followed by the lack of a suitable hybrid work model, the report highlighted.
