Amid turbulent times for the IT industry, IT major Infosys will now start being more selective in offering increments to employees. According to a report in the Financial Express, this move is a part of its strategy to differentiate between performers and non-performers.
Starting this fiscal, a certain percentage of employees will not receive annual salary hikes.
Richard Lobo, executive vice president, Head HR – Infosys told FE that there will be a percentage of people who will not get anything this year. According to the report, this decision by Infosys comes on the back of changes in the sector. The industry growth rate has come down to single digits. There is a stronger focus on people with skills that are in sync with business requirements.
“Today, one does not have the flexibility to give out lots of money,” he told FE. But he added that while high performers will continue to receive higher salary hikes, which could go into double digits, a majority of the employees will get single digit hikes.
Infosys generally gives out annual salary hikes in April but has deferred increments to July this fiscal. In the fiscal gone by, it gave out appraisals in mid-single digits.
Reflecting a subdued environment, salary increases across the IT industry has come down to single digits in the past couple of years.
For the industry, which employs nearly four million people, entry level salaries for engineering graduates has remained stable at around Rs 3.2 lakh over the last 4-5 years.
Lobo told FE that 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 added.
Infosys reported an attrition rate of 13.5% at the end of Q4 of FY17 as compared to 14.9% in the third quarter of the fiscal. Lobo says 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.