Coronavirus | From suspending wage hikes to shift allowance what’s more in store for IT employees?

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26 Aug, 2025 12:21

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Tech Mahindra employees were disappointed after the company suspended shift allowance starting May 1 on account of the novel coronavirus, or COVID-19, led disruption.

"It is unfair," employees said, as most of them continue to work in shifts.

Given that most of them took the shift attracted by the allowance, it was indeed disappointing.

However, this is unlikely to change and probably just the beginning of newer policy changes the industry will be witness to. According to hiring executives, there could be more in store as the IT sector is adopting to the new normal after the coronavirus outbreak, whether employees like it or not.

What happened in Tech Mahindra?
In a recent email to employees, Tech Mahindra said, “In order to adjust our policies to these newer ways of working, we are suspending payment of shift allowance and holiday allowance for all India-based associates with effect from May 1.”

Shift allowance is common in business process management (BPM), IT support and global in-house centres, where employees work on 24*7 projects mostly on a rotational basis. This would mean employees will have to alternate between night, early morning and day shifts, taking a toll on their health.

That is why IT firms usually incentivise employees working in these shifts by giving them additional allowance to make it more attractive, though they are not legally bound to. This is also a motivating factor for employees who are working at odd hours.

Ajay Shah, Head – Recruitment, Teamlease Services, said, “This is the premium companies were willing to pay to get workers in the night shift.”

However, with Tech Mahindra suspending the allowance, employees question the need to work in shifts.

A Tech Mahindra spokesperson explained that the shift allowance was paid for hardship due to travel to work at odd hours and other out of pocket expenses. With most of the employees working from home, the company had suspended the allowance. However, those working in office and client locations will continue to be eligible for the allowance, the spokesperson added.

Employees are unhappy with the fact that work from home (WFH) is here to stay. An employee Moneycontrol spoke to said, “Most of us moved to a 24*7 support project since we were promised an additional shift allowance of Rs 400 per shift.” This translates to Rs 6,000-7,000 per month and accounts for about 20-25 percent of an employee’s salary.

“Just because we are WFH, it does not mean that we are not working in shifts. I would rather move to day shift than working in 24*7 project," the employee added.

This will probably not be an isolated case. A hiring executive explained that as all IT firms brace for their worst quarter on the back of the virus outbreak, more such changes are expected and would become the new normal.

What more is in store for IT employees?Since the virus outbreak, some IT firms have asked employees to accept voluntary pay cuts. However, these are hardly voluntary as employees fear that non-compliance would lead to termination during these difficult times.

Wage hikes and promotions have been deferred indefinitely. Some firms have cut down travel allowance as well.

The executive pointed out that firms will continue to look at every aspect of salary structure and premium offerings would go away like shift allowances. The industry is already seeing job losses and hence people would be willing to work without a premium. So doing away with shift allowance could become permanent.

If WFH is the new normal, there would be no need for travel allowances as employees are not travelling. So, this is another aspect that will come under review. In cases where employers were offering allowance for upskilling or reskilling that would be done away with as well.

Aditya Narayan Mishra, Director and CEO, CIEL HR, said higher variable component in the salary is going to become a norm. At present, Mishra explained, the fixed versus variable component is 85-90:10-15 in the IT industry. “Going forward, fixed salary would fall to 70 or 60. So your performance will be more outcome based,” he added.