Macroeconomic pressures coupled with back-to-back tech layoffs and looming global recession have put a brake on the race for tech talent in the country, they told ET.
This trend is validated by data shared exclusively with ET by recruitment and staffing firm CIEL HR Services that mapped increments handed out for job switches across 62 mid to large IT companies in the last five months. Average hikes for new jobs fell from 54% in July and August 2022 to 45% in September and 37% in October, the survey showed. It is now settled at 35% and is likely to further come down, said Aditya Mishra, chief executive of CIEL HR Services.
“Frenzied salary hikes for job switches over the last two years have come down to pre-Covid levels with the decline in business. This has worsened with startups — and now big tech companies — opting for hiring freeze and layoffs due to economic slowdown and feared recession,” he said.
According to experts, in 2021, or the year of the ‘great resignation’, candidates were offered huge hikes in salary, sometimes going above 100% at the time of changing jobs. Then, tech talent had multiple offers in hand and were calling the shots, as reported by ET earlier. All this has changed. Not only the hikes at the time of job switch but also the number of job opportunities have come down over the last six months, experts said.
“New salary hikes have petered down to conservative percentages of 25-35%,” Ratna Gupta, senior director, ABC Consultants that does senior to mid-level hiring for companies across sectors.
Discover the stories of your interest
However, there are exceptions for certain roles such as Java Developers and Node JS engineers, where the demand is still high and professionals are receiving significant hikes, sometimes more than 100%, for switching jobs. The appetite to pay large hikes is currently low unless there is an extremely urgent and critical need for a specific role or new growth plan, Gupta said. Many organisations are in wait-and-watch mode, she added.
Ramesh Alluri Reddy, director at HR solutions firm Adecco India, said salary hikes for tech talent getting a new job offer is down to 30-35% for contractual and permanent roles from its peak a year ago.
For permanent roles, the demand for talent is even more selective. The demand and supply gap in the tech sector has shrunk due to geopolitical and macroeconomic factors like the Ukraine war and fear of recession, Reddy said.
Ashish Sanganeria, senior partner at executive search firm Transearch India, said, “Compared to last year, we have seen compensation expectations of talent go down and are a little more realistic. Leaders from listed tech companies where RSUs (restricted share units) are almost 50-60% of the overall CTC (cost to company) are ready to take marginal cuts for right opportunity and equity.”
According to a senior executive at one of the leading IT services companies, those techies who were commanding over 100% hikes a few months ago for new offers, may now have to face some salary correction.