HCL Tech, India’s third-largest IT services company, has initiated salary hikes for junior employees during the October-December quarter. Reports indicate that most junior staff received increments of 1-2%, while top performers enjoyed slightly higher raises of 3-4%. However, senior employees remain in limbo, awaiting their appraisals amid delayed wage hike cycles across the industry as per the Moneycontrol report.
The share price of HCL Tech has fallen by 1.11% as of 12:01 PM on 7 January 2025.
Moneycontrol reported that HCL Tech began rolling out salary increments for employees in the E0, E1, and E2 bands—mainly those with up to 10 years of experience. These junior-level employees received nominal increments compared to the company’s earlier promise of 7% average hikes and double-digit raises for top performers.
In contrast, employees in the E3 and higher bands—comprising mid to senior-level professionals—have yet to see any raises. Reports suggest that some senior employees have not received salary hikes in the last two to three years.
The delay in salary hikes is not unique to HCL Tech. Most leading IT companies, including Infosys and LTIMindtree, have deferred increments to later quarters of FY25. This trend reflects broader industry strategies to protect profit margins amidst declining discretionary spending and unpredictable demand.
Salaries form a substantial component of IT companies’ costs, making delays in wage hikes a tactical move to manage financial performance without immediate layoffs.
Responding to inquiries by Moneycontrol, HCL Tech reiterated statements made during its Q2 earnings conference, highlighting that increments are performance-linked and typically reviewed annually. The company claimed that top performers could still expect double-digit hikes of 12-15%.
Ramachandran Sundararajan, Chief People Officer at HCLTech, acknowledged that wage hike cycles are influenced by the timing of lateral hires and eligibility criteria for appraisals.
Despite offering lower-single-digit increments, HCL Tech posted robust performance metrics in the September quarter. It outperformed its Tier-1 peers—TCS, Infosys, and Wipro—in year-on-year revenue growth measured in constant currency.
The company also exceeded market expectations in EBIT margin growth and net profit, supported by diversified deal wins across industries, regions, and service categories.
HCLTech is scheduled to announce its December quarter earnings on January 17, which could shed light on its compensation strategies and growth trajectory.
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Published on: Jan 7, 2025, 2:52 PM IST
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