Infosys salary hikes: IT major to deny raises for bottom rung staff in FY18


As part of its new strategy, the company will be more selective in doling out increments this year

P P Thimmaya

IT major Infosys will give no annual salary increase to a certain percentage of employees starting this fiscal, as part of its revised strategy to differentiate between the performers and rest. Infosys, which reported an employee base of little over two lakh at the end of March, 2017, as part of its new strategy will be more selective in doling out increments. Talking to FE, Richard Lobo, executive vice president, Head HR – Infosys, said, “There will be a percentage of people who will not get anything this year.” This decision by Infosys has got to do with the broad changes in the sector with the industry growth rate coming down to single digits and stronger focus on people with skills which are in sync with business requirements. Lobo said the shift in thinking is linked with the budgets available to give out the salary hikes. “Today, one does not have the flexibility to give out lots of money,” he remarked. However, the HR head said that high performers will continue to receive higher salary increases which will go into double digits and majority of the employees will be given hikes in single digits. Lobo said the top performers in the company have consistently received a double digit rise in salary and this fiscal is also going to be no different. This shift has lot to do with focus on employees which bring in additional value in terms of technical skills and also higher billings. Infosys, which generally gives out annual salary hike in the month of April has now deferred it to July for this fiscal. The company gave out average salary increase in mid single digits for FY17.

For the Indian IT industry which employs close to four million people, the salary increase over the last couple of years has come down to single digits, reflecting the subdued environment. Even the salary for the entry level engineering graduates has remained stable at around Rs 3.2 lakh over the last four to five years. Now, there has been an increased scrutiny on the performance metric for the employees. Lobo said the increased attention on the performance of employees has been largely driven by business requirements and demands from the clients. “We need to make more number of our employees billable faster,” he remarked.

As part of these developments, the attrition rate at Infosys has stabilised over the last two years. The company reported an attrition rate of 13.5% at the end of fourth quarter of FY17 as compared to 14.9% in the third quarter of the fiscal. Lobo said there is a high focus on retaining the high performers in the company and the attrition rate in this category has come down to single digits.



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