Accenture will not be paying out hikes to its employees in India and Sri Lanka in 2023 except where it is legally mandated or where it has committed to it in critical skill areas, country managing director Ajay Vij said in an email to employees, a copy of which Moneycontrol has accessed. Accenture has over 3 lakh employees in India.
This comes at a time when the sector is facing numerous headwinds, and as per Accenture’s commentary at the end of September, it doesn’t expect an improvement in the discretionary spend environment or the macro. In March 2023, Accenture announced it was laying off 19,000 employees.
Vij said the company experienced a macro environment that was more challenging than anticipated at the beginning of the FY23 fiscal year, and growth was lower than planned. The Dublin-headquartered IT giant, which follows a September-August financial year, reported mixed numbers last quarter, and its guidance for FY24 was the second-lowest among the beginning of year guidance in the past 16 years.
In his email, Vij said, “Our rewards philosophy is to provide market relevant pay based on skills and location that is affordable for Accenture. Keeping our payroll aligned with market is essential to the health of our business, including competitive pricing of our services”.
“Given the context of our performance, we will not be providing any stay-at-level (base pay) increases this year except where legally mandated or committed in a few critical skill areas,” he added.
The email also stated that while it will payout individual performance bonuses based on the individual’s contributions wherever it is applicable, but said it will be ‘significantly lower than last year’.
Promotion demotion
“…our global annual bonus funding is based on our company performance. Given our performance, you should expect our global annual bonuses to be significantly lower than last year,” he said.
The company is also severely reducing its promotions.
Upto the level of Associate Director (Level 5), the company said it will reward promotions in December as scheduled, but it will be lower than last year. Accenture has 13 levels, with 13 being the lowest and 1 being the highest.
For levels 1 through 4, promotions have been postponed till June 2024.
“We are postponing our promotions to and within MD, and appointments to SMD, until June 2024 in order to allow ourselves to return to growth so that promotions are affordable,” Vij’s email said.
“Our rewards philosophy is to provide market relevant pay based on the skills and locations where we operate. We also consider a variety of factors, including the macroeconomic environment in making our decisions around pay and benefits,” a spokesperson for Accenture said in response to Moneycontrol's queries.
The IT major’s decisions are indicative of the larger climate in the sector, and its India counterparts have also undertaken similar decisions. Last quarter, HCLTech said it was skipping the salary hikes of senior management level staff, and deferred the payhikes of junior employees by a quarter.
Wipro has also pushed its salary hikes from September to December 2023, and Infosys has yet to roll out the salary hikes initially slated for April and July.
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